President Obama has apparently given up on Congressional approval for anything and is executive ordering various mortgage relief and other initiatives to help beleaguered citizens. Today, he will announce a couple of things that might help law school and other graduates saddled with unbearable student loans.
- The government was already going to cap income-sensitive federal student loan payments at 10 percent of income starting in 2014. The President is moving this date up to 2012.
- The government will improve the income-sensitive repayment plan with a “Pay as You Earn” program that forgives federal student loan debt after borrowers pay 10 percent of their income for 20 years. (Right now, borrowers have to pay 15 percent of their income for 25 years.)
- Starting in January, borrowers will get a 0.5 percent interest rate reduction for consolidating federal student loans. This will lower their monthly payments, of course, along with reducing the amount of money they pay over time.
So far, there is no relief in sight for law students with pricier private loans.