Student Loans Killing You? Here's a Little Secret
"Indeed, at a time when Congress is debating whether to raise student loan interest rates and defaults continue to skyrocket, [Income-Based Repayment]-enacted as part of the College Cost Reduction and Access Act of 2007 under the Bush administration and expanded under President Barack Obama-remains a largely obscure concept for many cash-strapped college graduates," Yahoo! Finance reports. "[A]ccording to DOE data as recent as January, a little more than 2.3 million borrowers had applied for IBR nationally, a small fraction of the estimated 38 million Americans with outstanding student loan debt. Over 1.6 million, or 65 percent, of those applicants have been enrolled in the program, with another 20 percent, or approximately 460,000 applicants, awaiting review." However, "a borrower with a high income-to-debt ratio may stand to benefit the most from programs such as IBR, they are often the least likely to apply, seeing repayment as a financial albatross. Also, many students struggling financially tend to drop out of school without ever consulting a financial aid counselor about their options, according to Justin Draeger, president of the National Association of Student Financial Aid Administrators."
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