The Obama administration announced Wednesday a plan that would make it easier for some student loan borrowers to repay their federal student loans.
Building on a law passed in last year that allowed student loan borrowers to cap their monthly payments at 15 percent of their discretionary income, beginning in 2014, Obama wants to change the cap to 10 percent and make those benefits available to some borrowers as soon as 2012.
It is estimated that this cap will reduce monthly payments for more than 1.6 million student borrowers, the administration said.
The administration also announced an initiative to allow some borrowrers to consolidate their loans at a lower interest rate, beginning in January 2012.
Florida has one of the highest student loan default rates in the county. In fiscal year 2009, student loan default rates in the state were 10.5 percent, an increase of more than 8 percent from the year before.
Borrowers looking to determine whether or not income-based repayment is the right option for them should visit www.studentaid.gov/ibr.
The CFPB also released the Student Debt Repayment Assistant, an online tool that provides borrowers, many of whom may be struggling with repayment, with information on income-based repayment, deferments, alternative payment programs, and much more. The Student Debt Repayment Assistant is available at ConsumerFinance.gov/students/repay
