I voted for President Obama twice, so this isn’t ritualized Obama-bashing….
The recent presidential headlines about making it easier to repay student loans are obscuring some of the basic facts and basic problems:
F’rinstance, way too many students with student loans don’t have degrees, because they didn’t finish their programs.
Way too many students have burdensome student loan obligations because they overpaid for their college degrees.
And, anyway, apparently most of the 37 million Americans who have student debt didn’t learn enough at college to be able to pay attention to the government’s high profile efforts and take advantage of easier loan repayment terms.
The “Pay As You Earn” program that lets borrowers cap repayments at 10% of discretionary income has been around for a couple years, but only about 4% of the nation’s borrowers have signed up for it. More than 35 million Americans with student loans haven’t taken advantage of the easier payment/forgiveness benefits.
NPR says too many borrowers don’t even know about the program. I can’t explain that one to you….
NPR also says—no surprise—that loan servicers, including the quasi-government Sallie Mae and other private financial companies, have little incentive to promote any loan payment adjustment option because it reduces their servicing fee revenue. It seems that some of the servicers make it difficult for borrowers to reduce their interest rates and repayment schedules. I think I can explain that one to you….