Obama Student Loans – Obama Plans to Cut Student Loan Payments


President Obama will propose a plan to cut the student loan payments of millions of Americans during his State of the Union address, the White House announced Monday. The president’s plan would cap payments on federal loans at 10% of a borrower’s income above a set minimum, defined as 150% of the poverty level for the borrower’s family, and allow loans to be forgiven after 20 years instead of 25.

For borrowers with a family of four, the federal poverty level is $22,050. Under the president’s plan someone who earns less than 150% of that amount, or $33,075, would owe nothing on a monthly basis. Those with higher incomes would have monthly student loan payments that equal 10% of their income above $33,075.

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