First, the good news:
Repaying a student loan could soon be a little less painful for modest earners, paying student loans.
Starting this week, anyone with a federal student loan can apply for a program, run by the Department of Education, that caps monthly payments based on income, and forgives remaining balances after 25 years. Those choosing to work in public service could have their loans forgiven after just 10 years.
Eligibility for income-based repayment (IBR) is determined by a person's income and loan size. A calculator at
http://www.ibrinfo.org can help borrowers determine their eligibility for the plan, which becomes available Wednesday.
"It's a way to borrow for college without going to the poor house," said Lauren Asher, president of the Institute for College Access & Success, a California-based nonprofit that runs the Project on Student Debt.
The program stems from the Education Department's College Cost Reduction and Access Act, signed in 2007, which authorized the creation of a new income-based repayment plan for both Federal Family Education Loan (FFEL) and Direct Loan borrowers on all Stafford and graduate PLUS loans.
Monthly payments would amount to less than 10 percent of income for most of the estimated 1 million people expected to enroll, experts say. Payments would never exceed 15 percent of any income above about $16,000 a year (or 150 percent of the poverty level).
Those who earn less than $16,000 would not have to make any monthly payments.
The new payment option is intended to provide relief for those who earn modest salaries and struggle under the weight of student loans for years on end. By stretching repayment over a longer period, monthly payments are kept at a reasonable portion of income, though most people would not see any savings on the total cost of the loan.
IBR "can lower costs and provides light at the end of the tunnel" for such borrowers, said Asher of the Institute for College Access & Success. That gives borrowers greater financial flexibility to save for retirement, buy a home or even pay for their own children's education, she said.
The program isn't for everyone, however.
In some cases, accruing interest could push the cost of the loan higher. And since loans are likely to be paid off within 25 years, the loan forgiveness aspect of the program won't apply to most people. To save on interest costs, those who could afford to would be better served paying off loans faster, said Mark Kantrowitz, publisher of FinAid.org, which tracks the college financial aid industry.
If a salary jump eventually disqualifies a borrower for the capped monthly payments, they would still be responsible for the cost of the loan and the interest that accrued up to that point. Monthly payments still couldn't exceed what they would be under a standard 10-year repayment plan. Of course, borrowers could opt to pay off debts faster if they chose.
There are already some options for those who can't afford big monthly payments, such as long-term payment plans spanning up to 30 years. But eligibility requirements are stricter, and monthly payments can still be high.
The government also offers a program similar to IBR called the income-contingent repayment plan. That plan is not as lenient as the new one, however, with payments capped at 20 percent of income beyond 100 percent of the poverty level. And it's also only available for direct federal loans.
The new program will be available for direct federal loans, as well as federal loans administered through private lenders. Most of those enrolled in the income-contingent plan are expected to switch over to the new program.
Parent PLUS loans, the federal loans parents can take out to pay for their children's education, are not eligible for either payment plan.
Now for the bad news:
US remains silent over McKinney arrest by Israel
Nearly a day after the detention of former US lawmaker Cynthia McKinney by Israeli forces, Washington has yet to make a reaction.
Israeli Navy detained former US congresswoman and Nobel Prize laureate Cynthia McKinney and twenty other human rights activists on board a relief boat outside Israel's territorial waters on Tuesday as they were heading to Gaza on a humanitarian mission.
Tel Aviv claims the boat was trying to break Israel's two-year siege on Gaza.
Ms McKinney -- the 2008 Green Party nominee for President of the United States-- has accused Tel Aviv of violating the international law by seizing an aid vessel in international waters.
"This is an outrageous violation of international law against us. Our boat was not in Israeli waters, and we were on a human rights mission to the Gaza Strip," McKinney said in a statement.
Green Party leaders have called on the White House and the US State Department to intervene and demand the immediate release of all the activists.
On Monday, the International Committee of the Red Cross warned of dire humanitarian situation in Gaza, saying 1.5 million Palestinians living in the coastal sliver are 'trapped in despair' because of the continuing Israeli blockade on the territory.
Since June 2007, when Israel imposed a blockade on the territory, no raw material has entered Gaza, stalling any attempt to rebuild the strip.
According to the humanitarian agency report, seriously ill patients were not receiving the treatment they needed and thousands of Gazans whose homes were destroyed during Israel's three-week Christmas war were still without shelter.
http://www.presstv.ir/detail.aspx?id=99532...
Posted By:
Wednesday, July 1st 2009 at 8:37PM
You can also
click
here to view all posts by this author...
