Student Loan Relief Expanded for Millions

What's Hot

Do This or Your iPhone Bill May SkyrocketSave

23 Upgrades Under $50 to Make Your House Look AwesomeAround The House

Trump Worth $10 Billion Less Than If He’d Simply Invested in Index FundsBusiness

11 Places in the World Where You Can Afford to Retire in StyleMore

What You Need to Know for 2017 Obamacare EnrollmentFamily

8 Things Rich People Buy That Make Them Look DumbAround The House

32 of the Highest-Paid American SpeakersMake

Amazon Prime No Longer Pledges Free 2-Day Shipping on All ItemsMore

More Caffeine Means Less Dementia for WomenFamily

9 Tips to Ensure You’ll Have Enough to RetireFamily

5 DIY Ways to Make Your Car Smell GreatCars

30 Awesome Things to Do in RetirementCollege

5 Spots Where Retirees Can Live for Less Than $40,000Real Estate

10 Ways to Pull Together the Down Payment for a HomeCredit & Debt

10 Ways to Reduce Your Homeowner’s Insurance RatesFamily

50 Ways to Make a Fast $50 (or Lots More)Grow

President Obama has extended eligibility for a cap on student loan payments at 10 percent of income.

President Obama has signed an executive order that could help ease the student loan burden of nearly 5 million borrowers.

The order extends eligibility for the Pay as You Earn program — which caps repayment at 10 percent of monthly discretionary income — to federal direct student loan borrowers who took out loans before October 2007 or haven’t borrowed since October 2011. They were previously excluded from the 10 percent limit but could qualify for a 15 percent cap.

“Any remaining balance is forgiven after 20 years of payments, or 10 years for those in public service jobs,” a White House statement says.

However, the adjustment won’t be available until December 2015.

Students graduate with an average of about $29,400 in student loan debt. Under the amended regulations, a 2009 college graduate with $26,500 in student loan debt and a $39,000 salary would experience a $1,500 reduction in annual loan payments, the White House said.

According to The Washington Post, Obama said the cost of college tuition and the rising burden of student debt are suffocating middle-class families. “We are here today because we believe that in America, no hardworking young person should be priced out of a higher education,” Obama said.

Unfortunately, not everyone who needs help will get it. Wrote Liz Weston for Reuters:

Some of the most burdened borrowers, however, will get little if any relief, financial aid experts said.

Private student loans and parent PLUS loans are not eligible for income-based options, and borrowers with huge debt loads can be shut out if their incomes are too high.

What do you think of the executive action taken by the president? Could you benefit from the changes? Share your comments below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: How Does Debt Affect Survivors After a Loved One’s Death?

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,704 more deals!