Ohio & Michigan's Oldest and Largest Latino / Hispanic Newspaper

Since 1989




    media kit    ad specs    classified ad rates    about us    contact us


Saving Money on Student Loans

By U.S. Congresswoman Marcy Kaptur

Education is the key to getting a good job.  The Census Bureau estimates that a college graduate will earn 75 percent on average more than someone who has only a high school diploma.  Unfortunately, many college students graduate with a heavy burden of student loan debt.

To help the millions of Americans who are paying off federal student loans, Congress passed the College Cost Reduction and Access Act in 2007.  Its provisions link repayment of student loans to income and family size.  As a result, many borrowers are now able to cap their monthly loan payments at a reasonable percentage of personal income.

Congresswoman Marcy Kaptur

The new Income Based Repayment option is available to borrowers who are repaying new and existing federal student loans (either Direct Loans or Federal Family Education Loans). Those with high student loan debt relative to their income are likely to be eligible, resulting in reduced monthly payments and, in some cases, no monthly payments at all.

For example, someone with student loan debt of $25,000 at 6.8 percent interest would have a monthly payment of $288 under the standard 10-year repayment plan. Under the income-based program, if the borrower were single with no dependents and had an Adjusted Gross Income of $30,000, the monthly payment would drop to $172 per month, a reduction of $116 per month.

Payments are recalculated each year. (Note: lower payments, while more manageable, might result in longer repayment periods and increased total interest charges.)

Borrowers who work in public service jobs may be eligible for forgiveness of remaining loan balances after 10 years.  Eligible public servants include firefighters, first responders, law enforcement officers, early childhood educators, public defenders and prosecutors, and men and women serving in the military. 

The forgiveness program can be used in conjunction with Income-Based Repayment, but is available only in the Direct Loan Program.  (Borrowers with Federal Family Education Loans can consolidate their loans into the Direct Loan Program in order to qualify.)

Other benefits that went into effect on July 1, 2009 include:

  • Lower interest rates on need-based (subsidized) federal student loans. Interest rates on these loans dropped to 5.6 percent.
  • Higher Pell Grant scholarships for low- and moderate-income students. Due to funding boosts provided by the American Recovery and Reinvestment Act, the maximum Pell Grant scholarship has increased to $5,550 – an $819 increase over two years ago.  In future years, the size of the grant will increase at the same rate as inflation plus one percent.

In today’s economy, the need for financial aid is greater than ever. A recent study found that 40 percent of students who earned bachelor’s degrees in 2000 received at least one Pell Grant. The latest federal budget provides $129 billion in new grants, loans, and work-study assistance to help students get the education they need.

For more information on student financial aid, call my office at 800-964-4699. Detailed information about repayment plans is available by calling the U.S. Department of Education at 800-4FED-AID (800-433-3243).


Editor’s Note: Marcy Kaptur represents the Ninth Congressional District in the U.S. House of Representatives (Ohio).






Web laprensa





«Tinta con sabor»     Ink with flavor!



Spanglish Weekly/Semanal

Your reliable source for current Latino news and Hispanic events with English and Spanish articles.
Contact us at [email protected] or call (419) 870-6565



Culturas Publication, Inc. d.b.a. La Prensa Newspaper

© Copyrighted by  Culturas Publication, Inc. 2009