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Payments cap will be available to more Fed loan debtors

Today, President Obama is due to take executive action to assist Federal student-loan debtors with their debt burdens, as reported yesterday by the New York Times.

Part of the plan is to expand a law that allows student-loan debtors to cap their payments at 10% of their income.  People who got student loans before October 2007 or who did not borrow after October 2011 would also be able to take advantage of this cap in payments for the first time beginning in December 2015, after the Department of Education passes new regulations.

Additionally, contracts with student-loan servicers will be changed to encourage them to help prevent people’s student loans from going delinquent or into default.  The government will try to ensure that the big tax-prep firms help make people aware of student-loan repayment options and of tax benefits related to student loans.

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