The President plans to take executive action to lower student loan payment by capping monthly payments for certain federal student loans at 10 percent of a borrower’s discretionary income.
The action would expand Obama’s “Pay as You Earn” program, which first launched in October 2011, making it available to those who took out student loans before October 2007.
Those who opt into the program will have their student loan payments set according to a sliding scale based on income. The remaining balance is forgiven after 20 years; those working in public service have any remaining balance forgiven after 10 years.
Obama, who is signing the memo on Monday afternoon, will also take other executive action to help Americans pay for college. The administration plans to renegotiate its contracts with federal student loan servicers to encourage them to help borrowers stay current on their payments and avoid delinquency or default.
The new plan is estimated to offer student debt relief to 5 million Americans.
SOURCE: MSNBC | PHOTO CREDIT: Getty