New program aimed to help borrowers pay off student loans - KMOV.com

New program aimed to help borrowers pay off student loans

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ST. LOUIS (KMOV.com) - About one in seven borrowers default on their loans within three years of repayment and now the Department of Education is taking steps to combat the issue.

The department wants help people with student debt find repayment options that fit their needs.

The Obama administration is undertaking the new program to enroll an additional 2 million people into repayment programs such as the Pay As You Earn program. The program caps monthly student loan payments at 10 percent of the borrower’s income.

Federal student loan debt exceeds $1.3 trillion, and in Missouri the average student debt is nearly $26,000 according to the Institute for College Access and Success.

The Department of Education will also work with 40 outside organizations to inform borrowers about the repayment options available to them. The long term goal for the department is to serve as a one-stop shop for borrowers to easily manage and repay their loans.

Though income-driven repayment plans are better suited for some borrowers, they are not always the best solution for everyone. These plans can leave borrowers with more interest because of the extended repayment window that come with them.

To learn more about the program, visit the new website by clicking here

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