Al McAffrey
Oklahoma State House
Project on Student Debt
Income-Based Repayment became available for the first time on July 1, 2009. At least a million federal student loan borrowers will be able to lower their monthly loan payments through this program, providing much-needed financial relief. Contact your lender directly to apply. There is also good news for students still in college, including more money for Pell Grants and lower interest rates for some student loans.
Student Loans and the Economic Crisis
With all of the problems in the credit markets, it is logical to ask whether families are able to get the student loans they need for college. Fortunately, federal student loans are as available as ever. Since most student loans are made or guaranteed by the federal government, policymakers were able to intervene to make sure that students could continue to borrow federal loans at reasonable, fixed interest rates. (See background on why there is no reason to worry about federal student loan availability).
A small portion of student borrowing has been in the form of private, non-federal loans. This market has had the same difficulties facing other types of credit, so private loans have become less available and more expensive. Many people who had relied on private loans are discovering that there are grant and federal loan options that can fill that void. This has resulted in a substantial increase in federal loan borrowing.
In tough economic times it is more important than ever to reduce the need to borrow and make college more affordable and accessible. Both the American Recovery and Reinvestment Act (the stimulus package), and President Obama's proposed budget move in this direction, and our 2009 Policy Agenda suggests other important ways to achieve these goals.
About the Project on Student Debt
For Americans of all socio-economic backgrounds, borrowing has become a primary way to pay for higher education. The Project on Student Debt works to increase public understanding of this trend and the implications for our families, economy, and society. Recognizing that loans play a critical role in making college possible, the Project's goal is to identify cost-effective solutions that expand educational opportunity, protect family financial security, and advance economic competitiveness.
The Project on Student Debt is an initiative of the Institute for College Access & Success, a nonprofit independent research and policy organization dedicated to making college more available and affordable to people of all backgrounds.
FOR MORE INFORMATION,
VISIT THE PROJECT FOR STUDENT DEBT
