Someone asked for a post on Student Loans, so here’s a huge explainer from the Post. Key points:
- The rate hike applies to Subsidized Stafford loans, which are about 26% of loans given. Subsidized Staffords are given to low-income borrowers and have a rate of 3.4% versus 6.8% on Unsubsidized Staffords.
- The hike is for new loans, so it won’t happen until this Fall.
- Since Congress can’t do shit until there’s a deadline, they haven’t done shit. Fall is like the year 2525 for the do-nothing Republicans. If a man is still alive and woman can survive by then, they’ll probably vote yet another extension.
- Much of this is mitigated by a program called Pay as You Earn which lets borrowers pay 10 percent of their disposable income every month for 20 years. There are a bunch of other income-based repayment schemes which also mitigate the cost of loans.
The income-based repayment was news to me, and seems like a good idea.