Blog

What the Federal Government is Doing About the Student Loan Situation

May 19, 2015

With the average college graduate hauling upwards of $30,000 worth of student loan debt into the workforce, it’s not surprising that many aren’t exactly getting a big jump out of the starting gate. In an already tight job market, starting off in debt makes finding a job that can support you that much more of a challenge.

In 2014, student loan debt surpassed credit card debt as the largest form of consumer debt, at $1.2 trillion, with 40 million Americans carrying some form of student debt. Such indebtedness is preventing consumers from investing in homes, buying cars, taking vacations and other spending that could stimulate the American economy.

So what kind of help is out there? What’s the federal government doing to ease the crisis?

Income-Based Repayment (IBR)

Signed into law by President Obama in 2010, this program limits the monthly payment for a student loan at 10% of discretionary income for students who make timely payments. It’s geared toward students with high student debt vs. a relatively modest income.

Debt Relief

A U.S. Senate bill, if passed, would reverse current law which excludes student loans from coverage when debtors seek relief through bankruptcy. President Obama’s William D. Ford Direct Loan Program makes borrowers eligible for loan forgiveness after 20 years, rather than 25. Also, the federal government will no longer subsidize private lenders for federally backed loans.

Free Tuition, Student Rights

More recently, President Obama submitted a $60 billion proposal to Congress that would make community college tuition-free. Obama’s Student Aid Bill of Rights would make provisions for students to file grievances that could be addressed by federal regulators and law enforcement agencies. It would also make disclosure mandatory whenever loans are moved to new lenders or creditors.

Educating Consumers

The Department of Education is making a greater effort to provide information and resources for students to better understand student loans and the impact they have on their lives. With these new measures, students can make more informed decisions on how to get their debt under control.

Keep in mind not all opportunities for debt relief are helpful, or even advisable, for students and borrowers. Offers to consolidate your student loans or ones to relieve debt are often simply new loans at higher interest rates that will merely relieve one debt and replace it with a new, potentially larger one. That’s why it’s important to research your options before taking on any new debt, or when seeking relief from existing debt.

Not sure where to start? Speak to one of our certified credit counselors at 1-800-500-6489 to see which options are best for you. For even more information on student loans, have a look at our student loan help section.



Learn how much you can save

Fill out the information below and one of our experts will contact you shortly.

Step 1 of 2

Almost Done!

Just a few more details to get started.

By providing your information, you consent and request to be contacted by CreditGuard and/or our member(s) to your phone, cell phone, email, text/SMS, and through the use of pre-recorded messages and automated dialing technology at the number(s) listed above even if your number provided on the form above is on a State, National or Corporate Do Not Call List. You are not required to purchase any goods and/or services. Standard carrier and messaging rates will apply.

Step 2 of 2

Help America Get Out of Debt
Bureau Veritas

Learn how much you can save

Fill out the information below and one of our experts will contact you shortly.

Step 1 of 2

Almost Done!

Just a few more details to get started.

By providing your information, you consent and request to be contacted by CreditGuard and/or our member(s) to your phone, cell phone, email, text/SMS, and through the use of pre-recorded messages and automated dialing technology at the number(s) listed above even if your number provided on the form above is on a State, National or Corporate Do Not Call List. You are not required to purchase any goods and/or services. Standard carrier and messaging rates will apply.

Step 2 of 2

Find Debt Relief Today!

Certified Credit Counselors are available Monday - Friday 8:00 am - 8:00 pm Eastern.

Also See…

For more information on debt consolidation, please visit:

Why Choose CreditGuard? Learn what sets our debt consolidation services apart from the rest and how we can help you take control of your debt.

The Ultimate Debt Survival Guide. Need some practical advice for dealing with debt? You’ve come to the right place. This free downloadable guide can teach you the basics of managing debt (and more).

Is Debt Settlement a Good Idea? Debt settlement and debt consolidation are not the same. Learn more about the process (and consequences) of settling your debts before going down that path.