It is my understanding this got signed into law.
Obama Student Loan Forgiveness
Earlier in his presidency, President Obama announced a student loan forgiveness plan one that has become known as the Obama student loan forgiveness program- for students who were unable to complete their student loan payments or had already completed a significant part of their payments for a long period of time. The Obama student loan forgiveness program automatically clears the remaining debt of anyone who has made regular payments on their federal student loans for a minimum of twenty years. People in military service or who are working in other government departments might have their debts cleared even earlier than that as per Obama Student Loan Forgiveness.
Loans Eligible for the Obama Student Loan Forgiveness Program
The Obama Student Loan Forgiveness plan currently only applies to federal loans such as Perkins or Stafford loans. People who have taken out private loans can also make use of student loan forgiveness programs offered by a number of private employers, but these loans are not covered under President Obama federal program. Some private employers have programs where they will agree to pay back your remaining debt (or your debt in full) if you agree to work for them for a certain period of time. While this mostly applies to people in specialized jobs such as the healthcare sector, a number of private companies have their own policies regarding student loan forgiveness programs.
Impact of the Obama Student Loan Forgiveness Program
The hope of President Obama student loan forgiveness program is that it will help alleviate the debt burden on college graduates. A college degree is only worth so much if the individual who holds it is buried in debt they cannot manage, and the idea is to help students become debt-free as soon as possible. Our philosophy of providing financial transparency and assistance through the whole life of the paying for college and repayment process is really similar to this-we want people to be able to afford a college education, and to be able to free themselves from a relatively small debt as soon as they can.
If you’re a student loan-burdened recent college graduate putting the final touches on a note to President Obama, thanking him for his recent executive order on debt repayment, don’t get too excited.
Mr. Obama formally widened the pool of eligible participants in the Pay as You Earn program (PAYE) and said it could save recent graduates hundreds of dollars every month, helping an additional five million people manage their student debt. It fulfills a promise — made in a chipper, animatedadvertisement posted to Mr. Obama’s YouTube channel in 2011 — that graduates would not have to make student loan repayments greater than 10 percent of their income.
But if you look at the numbers closely, PAYE saves you money only if you borrowed big and earn little.
The revised program caps monthly loan payments at 10 percent of discretionary income, defined as income exceeding 150 percent of the federal poverty level for a single person. Well-paid graduates and those working minimum-wage jobs will dedicate equal proportions of their income to paying off debt.