WASHINGTON, D.C. — The Obama administration estimates that 70,000 Michigan students are eligible for a new program that would reduce their monthly student loan payment, according to a report at MLive.com.

Called “Pay as You Earn,” the program allows college graduates to pay 10 percent of their discretionary income monthly toward their federal student loans, rather than the 15 percent required in the existing program, the report said. The balance of the debt is forgiven after 20 years.

The program will begin in 2012, according to MLive’s report. In a separate report, CBS News reported that a similar program had already been approved by Congress to begin in 2014, but that President Obama was expediting the program by executive order.

In addition, about 154,000 Michigan borrowers will be eligible for a separate program to consolidate their loans, according to MLive.com.

The president’s announcement came in the wake of a major report that outstanding student loans will reach $1 trillion by the end of the year, CBS News reported.

SOURCES:

MLive.com, “More than 70,000 Michigan students eligible for student loan payment modification, Obama says,” Oct. 26, 2011

CBS News, “Who will benefit from Obama's student loan plan?” Oct. 26, 2011

FURTHER READING:

Michigan Education Digest, “Student loans surpass credit card debt,” Aug. 12, 2010

Share