The White House proposes that the government forgive billions of dollars in student debt over the next decade, a plan that cheers student advocates, but critics say it would expand a program that already encourages students to borrow too much and stick taxpayers with the bill.
The proposal, included in President Barack Obama's budget for next year, would increase the number of borrowers eligible for a program known casually as income-based repayment, which aims to help low-income workers stay current on federal student debt.
Borrowers in the program make monthly payments equivalent to 10% of their income after taxes and basic living expenses, regardless of how much they owe. After 20 years of on-time payments—10 years for those who work in public or nonprofit jobs—the balance is forgiven.
Here's an example of how it would work:Ms. Rodriguez-Marshall said she racked up the debt by spreading her degree over 4½ years from the normal three and taking out student loans to cover living expenses, which the government allows.
During her studies her husband was laid off and she twice had to take out emergency student loans totaling more than $30,000 to make home repairs, pay unexpected medical costs and keep up with the family's $1,000-per-month health-insurance bills, she said.
She now is applying for government jobs that pay about $55,000 a year. According to a repayment calculator created by the New American Foundation, a Washington-based think tank, Ms. Rodriguez-Marshall would pay $273 per month in her first year under the program; without it, she would owe $3,562 a month. Under the program, she would pay about $102,000 over 10 years, and the government would forgive about $639,000, which includes interest. (emphasis mine)
Read the full story HERE.Forgive $639,000? BULLSHIT! You mean PASS THE TAB along to the American Taxpayer.
How's the program work for the guy who chose a less expensive school to go to...worked 2 part-time jobs and studied in between? All because he didn't want the burden of a student loan debt.
WHAT THIS DOES, is put everyone in line with their hands out.
The moms & dads who saved for their kids educations would now BE FOOLS to use their own money.
Everyone will want the more expensive schools and Government loans with all the Bells & Whistles because in the end, you're only paying 10% of their income after taxes and basic living expenses for 10/20 years and the rest of the loan, REGARDLESS OF THE AMOUNT is forgiven.
THIS IS AN OUTRAGE!
What ever happened to, You borrowed the damn...You pay the damn money back?
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