The Department of Education has launched a new website to help people with student loans find a repayment option that best suits their needs. The move is part of an effort the Obama administration is undertaking to enroll an additional 2 million people into repayment programs such as the Pay As You Earn program, which caps monthly student loan payments at 10 percent of income.
The Department of Housing and Community Development SmartBuy program is aimed at helping buyers burdened with student loans. It also reduces the inventory of homes acquired by the state’s Community Development Administration after foreclosures on properties purchased using the Maryland Mortgage Program. Federal student loan debt exceeds $1.3 trillion, and about one in seven borrowers default on their loans within three years of beginning to repay them. The average graduate walks away with $37,172 in student loan debt, a 6 percent increase over last year’s average. And nearly 10 percent of borrowers are in default, leading to garnished wages and wrecked credit.
Education Secretary John King said the department will also work with 40 outside organizations to educate borrowers about the repayment options available to them. In the long run, the department is moving toward a future one-stop shop where borrowers can more easily manage and repay their loans. The Government Accountability Office found last year that many eligible borrowers don’t participate in the income-based repayment programs, in part, because the department doesn’t consistently notify them of their options.
The new website is StudentLoans.gov/Repay.
ImageCopyright by consumeraffairs.com