To the Editor:
As a parent and a former teacher, I believe every student in Minnesota should have the opportunity to continue their education after high school, if they so choose. Our job market is changing rapidly, and, more and more, an advanced education is the best tool available for success in our global marketplace. What an increasing number of graduates are discovering, however, is that record high student debt is weakening their ability to fulfill their dream of owning a home, a new car, or even just covering the cost of basic needs.
Thanks to a new federal program that began on July 1st, some relief is on the way. Under the new Income-Based Repayment program, federal loan payments are based upon monthly income and family size. Most borrowers who sign up for the plan will pay less than 10 percent of their income toward student loans, according to www.ibrinfo.org, a website run by the nonprofit Project on Student Debt. 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 program is designed to allow graduates saddled with more debt than they can comfortably pay off in 10 years to stretch out their payments. After 25 years, what's due on the loan, including interest, is forgiven. Graduates with public service jobs in sectors such as education and health care could see their loans forgiven after a decade of payments.
To find out more, go to www.finaid.org/loans/scripts/interest.cgi. I am hopeful these new reductions in payments and interest will lessen the burden for college graduates, as well as encourage others to pursue their dream of continuing their education.
Rep. Lyndon Carlson represents Crystal, Robbinsdale, and Golden Valley in the Minnesota House and Chairs the House Finance Committee.