As a continuously growing problem, student loan debt default is reaching near the $1 trillion mark. With the job market, economic and personal debt burdens all influencing a graduate’s ability to make their payments, many people are forced into insolvency.
Unfortunately, Tampa bankruptcy is not an option for most people living under a large student loan debt burden. While bankruptcy may alleviate other sources of debt to free up income, very few people find the relief they need under such measures. With the topic off the White House table for years, a new bill is being considered that could bring some much needed help to student loan debt holders.
Last week, Rep. Karen Bass (D.-Calif) introduced the Student Loan Forgiveness Act of 2013. Attempting to provide some resolve to the burden of student loan debt default, the bill can be summed up by the following:
- Creates a 10-10 standard for student loan repayment, which essentially means that a debtor would be required to make payments equal to 10% if their discretionary income for 10 years; any remaining debt would be forgiven.
- Place a permanent cap on the interest rate for federal student loans at 3.4%, reducing the need to continuously address issues that push for the increase in rates.
- Allow eligible borrowers to convert their private loan debt into federal direct loans, which could then take advantage of the capped interest rate.
- Allow for the suspension of interest rates when borrowers are unemployed.
As always, there are two sides to the coin on this issue. Some are for the legislation, while others argue that the cost of such measures would facilitate abuse of the system and only further threaten the country’s current deficit problems.