Student Loan Program Should Not Be Paid

781 WordsJun 6, 20164 Pages
The release of President Barack Obama 's budget last month sparked growing concerns that student loan forgiveness - specifically for graduate school student debt - will cost taxpayers much more than originally estimated. As the Student Loan Ranger discussed previously, the president 's budget shows a shortfall of approximately $21 billion for the federal student loan programs, in large part due to a projection of more borrowers taking advantage of loan forgiveness after making 10 to 25 years of income-based payments. According to the New America Foundation, as much as 40 percent of the nation 's recent federal loan disbursements are for graduate student debt. Graduate student borrowers are much more likely to have substantial loan amounts forgiven under the income-based repayment, Pay As You Earn and Public Service Loan Forgiveness programs. That 's because dependent undergraduate borrowers cannot borrow more than $31,000 in federal student loans - independent students can borrow up to $57,500 - making it unlikely there would be any remaining balance after 10 or 20 years of payment unless the borrower made an unusually low income for a long time. Graduate borrowers, on the other hand, can borrow up to the cost of attendance through the Grad PLUS program, up to $138,500 for their entire undergraduate and graduate study period. In fact, according to the New America report, the median debt load for a graduate student upon completion of study in 2012 was $57,600. One in 4
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