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New federal programs may help ease student loan debt for some

On Behalf of | Dec 8, 2016 | Chapter 13

Most people in Tennessee who pursued a higher education likely relied on student loans in order to be able to afford college. While such loans are key in allowing many people to attend college who would not otherwise be able to, those people are then left with large amounts of debt that must be repaid after graduation. For those who graduated in 2016, the average amount owed is $37,172, according to Business Insider.

Adding to the problem is that many of those who were on the receiving end of student loans did not fully understand what they were getting into. Being saddled with large payments every month is affecting the quality of life for many people and may perhaps contribute to larger financial problems down the road.

Relief may be in sight for some, however, thanks to some federal programs put into place by the Obama administration. According to Fortune, the programs help borrowers in a few different ways. If a loan goes unpaid after a certain amount of time, the balance may be forgiven. In addition, monthly payment amounts may be lowered when the amount of income the person earns is factored in. It is now estimated that these programs will lead to roughly $108 million in student loan forgiveness over the next two decades, which is more than was previously anticipated.

However, with a new administration taking office in 2017, some people question whether some or all of these programs will be repealed. In particular, the current rules have made loan forgiveness possible for students who were deceived by for-profit schools and some fear that may come to end.


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