Strengthening the Perkins Loan Program
President Obama's budget proposes expanding and redesigning the Perkins Loan Program, a low-cost federal loan option available to some students through their colleges. Congress will play a significant role in shaping the new Perkins program, as students and families worry more than ever about how pay for college and student debt levels continue to rise. Our new white paper, Reasons & Recommendations for Retooling the Perkins Loan Program, analyzes the current program and includes specific suggestions for increasing its impact on college affordability and student success.
Recent Negotiated Rulemaking to Improve Financial Aid Policies
The U.S. Department of Education recently initiated a negotiated rulemaking process to address a variety of financial aid issues. The process began with three hearings in June, paired with open forums about ways the Department's communications about financial aid could "improve college planning, preparation, and access." Members of our staff attended the Philadelphia events and presented the following comments:
There's Still Time to Take Action for Real Loan Forgiveness!
In addition to lowering monthly student loan payments, the Income-Based Repayment program forgives any remaining debt -- including interest -- after 25 years. Most borrowers will pay off their debt before then, but under current law, if there's anything left to forgive after 25 years, the amount forgiven would be taxed as income to the borrower.
A bipartisan bill in the U.S. House of Representatives, H.R.2492, would prevent the taxation of debt forgiven through Income-Based Repayment. Loan forgiveness is supposed to wipe the slate clean for responsible borrowers, not create a new financial obligation.
If you haven't already, please take a moment to write to your representative and urge them to support H.R. 2492 and ensure there's really a light at the end of the tunnel.
(This message was sent to the Project on Student Debt mailing list on July 10, 2009.)