Remember the Health Care and Education Act of 2010? Either way let me refresh your memory. President Obama signed this off on this law in March 2010 and then it took effect July 1, 2010. Among many things having to do with education reform, one the biggest benefits to students was that it would restructure the federal college loan repayment plan, putting several hundred dollars more a month back into the pockets of those paying off their loans.

Sounds good to me—except for one tiny detail; the new repayment plan was not supposed to take effect until 2014. The problem is, however, everyone is drowning in debt right now. So far, over 30,000 people have signed the We The People petition on The While House website asking for help managing student debt.

So President Obama decided 2014 is too long to wait to start administering student debt relief. Bypassing Congress, President Obama today announced that he’s using his executive authority to accelerate the debt relief in the following ways:

Lower Loan Payments

Under the old federal student loan agreement, once a student graduated and started working, he or she was expected to make monthly payments of 15 percent of their discretionary income. After 25 years of making these payments any balance left on the loan would be forgiven.

But now, starting June 2012 (instead of 2014), under the new Health Care and Education Act, these limits will be lowered to 10 percent of a borrower’s monthly discretionary income to be paid back over 20 years. After 20 years the remainder of the debt will be wiped clean.

This may not sound like much, however, it quickly adds up when you consider that there are nearly half a million low-income borrowers out there right now. This small change creates a cost savings of several hundred dollars per month per borrower. That’s a lot of money that will be pumped back into the economy through consumer spending. (And at this point, every little bit helps.)

Special Debt Consolidation Loans

Until last year there were two ways to get a student loan: through the federal government by way of Pell Grants and through private banks via the Federal Family Education Loan program. Under the latter, private lending institutions received funds from the government to provide student loans that were guaranteed by the federal government. In other words the government paid banks (in the form of subsidies) to loan students money, and then paid the bank again if a student defaulted on a loan.

Last year President Obama got rid of the Federal Family Education Loan program (much to the dismay of banks), and instead dumped all that bank subsidy money into the existing Pell Grant Fund. However, by then many graduates were already saddled with both federal student loans and FFEL private bank loans, which meant two monthly payments.

But now starting in January 2012 The U.S. Department of Education will allow people to consolidate their student loans under the Special Debt Consolidation Loans initiative AND get a half-percent cut on the interest rate. It’s estimated that 6 million people could qualify for this consolidation, which again could translate into savings that hopefully will be pumped back into the economy through discretionary spending.

But if this is something you think you might want to do, you have to act fast. The window of time you can consolidate your loans is short; January 2012 through June 2012.

Even though these might seem like small gestures they help graduates burdened with debt get over big hurdles. No one wants to default on a loan, and student debt especially follows you around for life no matter what. If the federal government wants to help you manage your debt, then by all means, take advantage of those opportunities while you can. You never know when they might go away.

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