Starting July 1, 2014, President Obama announced, the Income Based Repayment (IBR) plan will allow students to repay their student loans at a rate of 10 percent of their monthly income instead of the current 15 percent, according to a press release from the White House
The IBR, created in 2007 to allow borrowers to repay their loans in portions according to their salary, currently states that borrowers must pay monthly loan payments of at least 15% of their monthly income.
“Student debt levels have skyrocketed,” said Rich Williams, a spokesman for the U.S. Public Interest Research Group. “With millions of student borrowers saddled with unmanageable levels of debt, these valuable benefits cannot start a moment too soon.”
In addition, the Consumer Financial Project Bureau and the Department of Education joined forces and launched a new “Know Before You Owe” project. This will create a model financial aid disclosure form that will help students better understand the type and amount of loan they qualify for, according to the White House.
“It’ll be amazing if the government can help us out a little bit,” said Daniel Spinoza. “So far, all I see done is a rise in fees every single semester.”