Kennedy touts student loan program
Senator Edward M. Kennedy sent a letter today to Massachusetts college leaders, urging them to make sure students know about a new program that makes it less expensive to repay student loans.
Under the program that starts Wednesday, monthly payments are capped based on a graduate's income and remaining balances are wiped clean after 25 years. Those who take public service jobs can get their loans forgiven after 10 years.
"A college degree has never been more important. Yet it’s increasingly difficult for students to afford. In particular, the prospect of heavy loan burdens is discouraging more and more students from attending the college of their choice, or pursuing jobs in the public interest. More than two-thirds of college students graduate with federal loan debt averaging $20,000 after graduation," wrote Kennedy, chairman of the Health, Education, Labor, and Pensions Committee .
"College affordability has long been a major concern of mine in the Senate and I’m writing now to draw your attention to a new option – Income Based Repayment – that will make loan repayment easier for students, no matter what job they take after graduation. If you haven’t done so already, I urge you to inform your students about it."
His full letter is below:
June 30, 2009
Dear College President:
A college degree has never been more important. Yet it’s increasingly difficult for students to afford. In particular, the prospect of heavy loan burdens is discouraging more and more students from attending the college of their choice, or pursuing jobs in the public interest. More than two-thirds of college students graduate with federal loan debt averaging $20,000 after graduation.
College affordability has long been a major concern of mine in the Senate and I’m writing now to draw your attention to a new option – Income Based Repayment – that will make loan repayment easier for students, no matter what job they take after graduation. If you haven’t done so already, I urge you to inform your students about it.
Income Based Repayment, or IBR, becomes available on July 1. It was created by the College Cost Reduction and Access Act of 2007, and its goal is to keep all career options open to college graduates by preventing payments on federal student loans from exceeding 15 percent of a borrower’s disposable income. IBR borrowers can also have their loans forgiven after 25 years of repayment, or after 10 years in a public service career.
The Department of Education provides more information about IBR, including an easy-to-use IBR Calculator that estimates monthly payments under the program, on its student aid website, http://studentaid.ed.gov/.
To apply for IBR, current borrowers should contact the lender or lenders who hold their student loans. Attached is additional information about the program.
Please contact my office if you have any questions. I’m hopeful that this new option will make college more affordable for more students, and college graduates’ employment decisions will not be dictated by the terms of their student loans.
With respect and appreciation, and I commend you for all you’re doing to put students on paths to lifetime success.
Sincerely,
Edward M. Kennedy
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Nothing so satisfying as being very generous with Other People's Money. I just do not have the gall to do that.
Yes, it is a loan but one with a program to forgive them and at rates far lower than economics can support. So, money is taken from all of us, "loaned" to a few and the return on investment to the lenders shows up how? Please do not tell me the squishy feel-good, "good for society" drivel.
A college degree has never been more important. Yet it’s increasingly difficult for students to afford.
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It is so expensive because we throw so much money at it and the colleges have sucked it all up and raised tuition accordingly. Heck if they think they can get it they will, how are they any different than any other capitalistic endeavor that will charge what the market can bear?
Kennedy is a wealthy priviledged guy who has always been great at spending taxpayers money, and then taking credit for it as if he were a hero, regardless of the degree to which he had anything to do with a bill or program. Nothing like JFK.
This is all well and good, and I have been a Kennedy supporter for over 40 years- but the requirement to consolidate under the Federal Direct Student Loan Program, and that agency's lack of oversight, means that any requests w/out Legislation will be the usual 'looks good on paper, does not translate practiaclly...'
I have been dealing w/this agency for a year now, and as a public servant making a lower yearly income, they pegged my payment at twice what i had to pay a very poorly rated student loan consolidation company; when I questioned how this could be, I was told, " With the other company you would not have your loan forgiven after ten years, thus the higher repayment amt." This is ludicrous, and not what the legislation had intended, so much for the unintended consequences of legislation and the subsequent loopholes.
It is easy to appear magnanimous with other peoples money. That is the Hallmark of this Phony Buffoon. This guy is green unless iy involves his view if Natucket Sound. I could go on but there is limited space and SOOOOOOOOOOO much more to tell!
BenWhite..this program actually makes more money for the government. By postponing quick payment of the principal, interest gets to accumulate for a longer period of time on a larger balance.
Furthermore, education has positive externalities for society. Do you want to live in a society where your retirement depends on educated, productive workers or on a bunch of useless and unemployable people?
I consolidated my loans back in 2005 with Student Assistance Foundation safmt.org and have never had a problem. The monthly payment is low and I have a 20 year pay back period.
Go to College if you have the connections to get a JOB.
College is a BIG RIP OFF....you sacrifice your TIME/MONEY and go without only to find that men RULE in this world still. YOU will never get the job you qualify for and all will be WAISTED...........................WAISTED..........As a woman you are better off being a gold digger.
You should know, you voted for a male president.
It would be nice if students with no credit history could get loans to go to college. Some parents struggle to pay their bills and have poor credit because of it and cant take out a loan for them. If their kids dont have any credit they cant get loans so how can they go to school?
Seriously, can you wingnuts give the whole woo is me taxes junk a break for like 5 minutes? Spending money on education is NEVER a waste. This is a great program that will give those without the means an opportunity to be productive members of society.
This is all well and good, and I have been a Kennedy supporter for over 40 years......
Well Marianne Hightman you are complete DB because this criminal has been wasting taxpayer dollars at the public trough far too long because of voters like you.
I have a better idea, keep your state and federal hands out of my wallet and I can affort to pay for my own kids college expenses without loans
Tigress, people might take you a little more seriously if you actually used proper grammar ... "WAISTED"? "WASTED" ... duh
I went to school with grants, scholarships, work study, part-time jobs-- and student loans. I maintained a 3.8 through college. I graduated. I did not get pregnant out of wedlock, do drugs, etc. I owed $13,500 when I graduated. I began working as many as three jobs at a time after I graduated. I spent a year in Americorps National Service ( Did you know one is taxed on the "education award" one receives and charged interest while one's loan is in deferment during this service time?) Fifteen years later, I now work a full time professional job, a part-time retail job, and a part-time freelance job. And after 15 years I still owe $10,400 because of accrued AND capitalized interest!!! And there is NOTHING, I am told, to be done about that.
Thank you, Senator Kennedy!
Anyone who carries student loans knows how difficult it is to pay them down. It's a feeling of hopelessness unlike anything in the world.
Thanks, Senator, for your contributions to the IBR plan!!
I worked nights in a factory to pay for college. So now I pay taxes to send lazy students to school so the poor darlings do not have to work. Isn't this a great country?
"It would be nice if students with no credit history could get loans to go to college. Some parents struggle to pay their bills and have poor credit because of it and cant take out a loan for them. If their kids dont have any credit they cant get loans so how can they go to school? "
Federal Student Loans are NOT based on credit score ... do a little research before you complain!!!
There should a complete overhaul of the whole student loan program. It should not just benefit those who do or are able to get certain jobs. The laws should not be so tough either. There should not be such interest and if one falls behind on payments or whatever the interest should not exceed beyond a certain point of the original principal. There should be stronger measures for those who have disbilities that have enough daily burdens to get through each day. The time period should be shorter than 25 years. A quarter of ones life should not be in slavery for an education. If the government scrapped the interest a lot more people would pay off their loans.