President Obama signs Executive Memorandum on federal student loan repayments

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Contact: Jared King
Communications Director
Navajo Nation Washington Office
202-200-0625
jking@nnwo.org

For Immediate Release

President Obama signs Executive Memorandum on federal student loan repayments

WASHINGTON—On June 9, President Obama signed an Executive Memorandum expanding eligibility for the Pay As You Earn (PAYE) federal student loan repayment program.

Total student loan debt owed by Americans is now $1.2 trillion. According to the U.S. Department of Education, 71 percent of students earning a bachelor’s degree graduate with student loan debt averaging $29,400.

The Memorandum signed by the president directs the secretary of Education to propose regulations within one year that “will allow additional students who borrowed Federal Direct Loans to cap their Federal student loan payments at 10 percent of their income.” It is estimated that up to $5 million more people who took out loans before October 2007 will be able to take advantage of the repayment program.

The PAYE limits monthly student loan payments to 10 percent of annual discretionary income, with any remaining debt forgiven after 20 years. To be eligible for the PAYE you must have a partial financial hardship determined by whether the amount you would owe under a standard 10 year repayment plan is greater than the amount you would pay under the PAYE.

Newly eligible borrowers will be able to take advantage of the new program by Dec. 31, 2015.

More information on the PAYE Program and other repayment programs may be found at https://studentaid.ed.gov/repay-loans/understand/plans

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