SHAHEEN: PAY AS YOU EARN STUDENT LOAN PROGRAM WILL HELP STUDENT BORROWERS STAY ON TRACK
January 15, 2013
New student loan repayment program will lower monthly bills based on borrower’s income
(Manchester, N.H) – Our workforce must have the skills to compete in a global economy and that means making sure college is affordable, U.S. Senator Jeanne Shaheen (D-NH) said today at a discussion on student loans at UNH Manchester. Shaheen specifically spoke about the benefits of the new Pay As You Earn repayment plan, which would cap monthly payment for some student loan borrowers at an amount that is affordable based on their income.
The Pay As You Earn plan caps payments for Federal Direct Student Loans at 10 percent of discretionary income for eligible borrowers. The Department of Education estimates that as many as 1.6 million students could reduce their monthly payments with this plan.
"I know that repaying student loans is a real concern for many recent graduates, especially as our economy continues to recover," said Shaheen. "The Pay as You Earn Program will make it easier for student borrowers to lower their monthly payments. This is especially important for workers in lower-paying public service careers, such as teachers, nurses, or first-responders. Students should be able to pursue a career based on their passions and interests, not by concerns about being able to pay back their loans."
New Hampshire has the highest average student college debt in the nation at $32,440 per student. The Granite State ranks second in the nation when it comes to the number of college students with debt: 75 percent.
“We are grateful for Senator Shaheen’s support of our students and willingness to share information about the Pay as you Earn Repayment program,” said Ali Rafieymehr, Dean of UNH Manchester. “The program will make college possible for our students and ensure a path to financial security after graduation.”
Senator Shaheen has long worked to increase college affordability. As Senator, she worked to avoid a doubling of interest rates on federally subsidized Stafford loans that could have meant more than $30 million in increased student loan costs for New Hampshire students. She also supported education reforms in 2010 that increased the maximum Pell Grant to $5,550 to help low-income students go to college and made student loan debt more manageable for all by capping repayments at 10 percent of discretionary income. As Governor, she launched a tax-free college tuition savings plan for New Hampshire, one of the first of its kind in the nation.
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