More help announced for college graduates struggling to repay their student loans

In today's challenging economic climate, repayment of student loans can lead to anxiety and frustration. However, thanks to several new federal initiatives, borrowers may receive some much-needed assistance in managing student loan repayments, according to the Chicago Sun-Times.

Federal education officials have been attempting to raise awareness of a new program, known as Income-Based Repayment (IBR) that aims to reduce the financial pressure of student loan debt. Although the initiative is currently underused, with just 450,000 of a potential 36 million eligible borrowers enrolled, more students are receiving help in managing their payments.

According to the program's official website, students participating in Federal Direct Student Loan and Federal Family Education Loan Programs are eligible for the IBR initiative. For many debtors enrolled in the program, repayments will be less than 10 percent of the annual income, and any remaining debt will be forgiven after 25 years. If borrowers earn less than 150 percent of the federal poverty guidelines, payments will be reduced to zero until their financial situation improves.

"For people who are just out of college and starting at the bottom, it’s a huge help to have a payment that matches what’s going on in your life," Stephanie Holstein, a member of the IBR program for more than two years and graduate of the University of Notre Dame, one of the leading colleges in Indiana, told the newspaper.

What do you think? Would you be willing to try this new loan program? 

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  1. I am lucky that I have read the post above. Very informative. I would like to share my opinion – Student loan Interest rates had been on a rising trend for the last five years. Student loan rates usually adhere to the shifting trends of the prime rate or the LIBOR index. that’s, once the Prime rate starts to show a rising trend, student loans could also display that trend as well. The bottom line is, the federal government sets the Federal Student loan rates for every July 1st. Annually, the federal government has raised the student interest rate (reflecting the Prime rate). Generally, it is anticipated that student interest rates can continue to rise or stay at a higher rate in the following few years, even though the federal government guarenteed the rates of federal loans never to exceed 8.5 percent. But this cap doesn’t carry over to non-federal student loans.

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