KIMT News 3 – Branch manager of Consumer Credit Counseling of Northeastern Iowa, Kathye Gaines, is all about helping you manage your debt, including those pesky student loans.
“The biggest struggle is making the payments, because once they’re out of school those bills start coming in, and they’re seeing their time frame is up. That they have to start paying and the monthly payment is a real shock,” said Gaines.
That income that you may be making after school usually starts out pretty low leading to your struggle to pay them off. That’s where the President’s plan comes in, capping the payments at 10 percent of income.
“The 10 percent is going to be great once you’re out of school. Your income, the school may say is you’re going to make this much money, but that’s not what you start out making so, your income is going to be less and adjusting accordingly,” said Gaines.
Obama has signed an executive order that not only puts in the 10-percent cap for those you borrowed loans before October of 2007, but also forgives student loans for some borrowers after 20 years who took out loans from October of 2007 till October of 2011. President of Waldorf College, Bob Alsop, says colleges are always concerned about the cost of higher education, but want students to remember the long-term benefits.
“And while student loan debt is a concern, students are much better positioned in the future,” said Alsop.
Gaines agrees. She’s just glad to see things made easier for college grads before they see those long-term benefits.
“Once this program goes into effect and we really see the fine details, I think we’re going to be able to see a lot more people that are going to be able to afford their payment,” said Gaines.
Gaines stresses that the companies you’re taking your student loans out with, are usually very willing to work with you on a repayment plan.
She says she and her company have been working with them for years on basing payments on a borrower’s income.
President Obama has also said he would be for allowing students to refinance both their public and private loans at lower interest rates. The new regulations would not be implemented until December of 2015.