The administration’s “Pay as You Earn” proposal will reduce monthly loan payments by capping them at 10 percent of discretionary income to make loan repayment more manageable for recent graduates. Additionally, 10- and 20-year loan forgiveness may be available to borrowers who successfully meet their monthly payments as a part of the “Pay as You Earn” plan.
Click here to learn more about the “Pay as You Earn” plan and to find out if you are eligible.
“We know that higher education is one of the keys to ensuring our economic competitiveness in the 21st century,” Capps said. “That’s why we need to make sure going to college is more affordable and that earning a degree doesn’t overwhelm our nation’s young people with debt after graduation. Unfortunately, years of budget cuts at the state level are shifting a larger and larger portion of the cost of higher education on to our students and their families, making it especially important for the federal government to step up and offer help.
“The implementation of President Obama’s plan will put more money in the pockets of borrowers on the Central Coast, reduce the risk of default, and encourage more job creation by increasing consumer demand. I encourage my constituents on the Central Coast to use the Department of Education’s online tool to see whether they are eligible the ‘Pay as You Earn Plan,’ and to take advantage of it if it makes sense for you.”
“Pegging loan payments to income greatly diminishes the stress that I’ve felt when thinking of the payments that I’ll have to make after graduating,” UCSB student Michael Dean said. “I know now that even if I find a job doing something I love, something meaningful and productive for my community, regardless of how well or how little that job pays, I will be able to pay back my loans fairly, and in a way that will leave intact my life goals, and any future plans I might develop that could be hampered by student loan debt.”
— Ashley Schapitl is press secretary for Rep. Lois Capps, D-Santa Barbara.