Student Loan Program Expanded

Nearly 200,000 Michigan residents will benefit from the recently expanded “Pay As You Earn” repayment plan for federal student loans, according to a report released by the White House. President Barack Obama signed an executive memorandum on Monday expanding eligibility for the program to borrowers with loans made prior to 2011. A report from the White House Council of Economic Advisers and Domestic Policy Group shows about 192,000 of Michigan’s more than 1.5 million student loan borrowers will be affected by the change. The Pay As You Earn plan caps payments at 10 percent of the borrower’s discretionary income, which is defined as the amount exceeding 150 percent of the poverty level for the household, and lowers payments substantially compared to the standard 10-year repayment plan. The plan also moves the forgiveness date for loans not paid back in full to 20 years or 10 years for those in public service jobs.