If you’re struggling to make ends meet, you’re not alone. While many of us have decent jobs and an income that sounds good on paper, when you put it in context of the amount of debt we owe every month on our student loan payments, well, that’s when things get tricky, resulting in our generation being known for relying on side hustles and additional roommates throughout our 20s in order to have a measure of disposable income. However, for those of us struggling the most, things might actually get better, because the U.S. government has just agreed to forgive approximately $108 billion in student loan debt.
Under the Obama administration, many of us have switched over to an income-based repayment plan, meaning that our payments back to the government are capped to 10% of our earnings; however, for the government, this hasn’t been as effective as previously thought. Under this program, payments are drastically reduced, and often forgiven after a 10-year period if you go into a public service role, or 20-year period if you work private sector.
Unsurprisingly, since we’re all pretty broke, we started taking advantage of this plan, and according to a new report by the Wall Street Journal, enrollment has tripled to 5.3 million borrowers. Because of this program and our enrollment in it, the government is now expecting to forgive a total of $108 billion in income-based repayment plans, and another $29 billion for those that literally die before they can pay off their loans. As more people begin to enroll in income-based repayment plans, the amount that the government will forgive will only increase.
For those of us with bigger balances and those with graduate education, this provides the biggest boost. So essentially, the takeaway from this report is that unless you’re planning on paying off your student loans in the first five years with your giant incomes like all of these assholes you see on Forbes, switching to income-based repayment seems like the best decision you could possibly make for your personal finances. For the government, this big loss in revenue kind of blows, and I’m sure the new President-elect will come up with or elaborate upon a way to fix this issue, but for now, it’s probably in your best interest to take advantage of income-based repayment, because the government’s agreed to have your back once your mandatory ten or twenty years of service are up. .
[via Wall Street Journal]
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