Baldwin Applauds Obama's College Loan Plan

Statement

Congresswoman Tammy Baldwin (D-WI) issued the following statement in response to President Obama's executive action to lessen the strain of student loan debt on new college graduates.

"I applaud President Obama's move to lessen the strain on new graduates of repaying student loans," said Congresswoman Baldwin. "While middle class and low income Wisconsin families are struggling mightily in this recession, Republicans in Congress are unwilling to take the steps necessary to create jobs now. Hard-hit Wisconsin families can't wait another day. I hear stories from students in my district who are deeply worried about finding a job after graduation and repaying their student loans even if they are lucky enough to find a low-paying, entry-level position.

"While they're in school, students should not have to worry about repaying their college loans. Once in the workforce, their focus should be productivity, rather than their unmanageable debt. I urge Wisconsin students to learn what their loan repayment options are; and I will continue my efforts to help make college affordable and well-paying jobs available when they graduate," Baldwin said.

Starting this January an estimated six million students and recent college graduates will be able to consolidate their loans and reduce their interest rates.

Starting next year, the new "Pay As You Earn" proposal will allow about 1.6 million students the ability to cap their loan payments at 10 percent of their discretionary income, and the plan will forgive the balance of their debt after 20 years of payments.

Starting in 2014, all borrowers will be able to reduce their monthly student loan payments to 10 percent of their discretionary income.

Current law allows borrowers to limit their loan payments to 15 percent of their discretionary income and forgives all remaining debt after 25 years of payments. However, few students know about this option. Students can find out if they are currently eligible for and income-based repayment (IBR) plan at www.studentaid.ed.gov/ibr.

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