The interest rate cut…
- Almost 5.5 million students borrow federal student loans every year. Half of these borrowers belong to the families whom income is between $26,000-68,000 as described by Congressional Research Service.
- 38% African-American students take federal student loans every year.
- 25% Hispanic students take out need-based student loans every year.
The Income-Based Repayment program…
- Its hard to give any perfect estimation, approximately in end of 2008 there were almost $556 billion in outstanding federal loans which were having almost 95 million student loans and more than 30 million borrowers. Almost 8.9 million students borrowed federal loans in 2008.
The Pell Grant Scholarship…
- Almost 6 million students got the Pell Grant scholarship in 2007/2008 school year and in them 75% students were those who had their family income below $30,000.
- 47% African-American students receive the Pell Grant scholarships every year.
- 37% Hispanic students receive the Pell Grant scholarship every year.
Who is eligible For Income-Based repayment?
- Current borrowers who are paying back federal student loans and new borrowers whose debt increase 15% of their discretionary income. Mostly the borrowers who haves heavy debt loads or not having well paying jobs will qualify.
- The program covers all federal loans – both Direct and federal Family Education loans – made to students, including Stafford, Grad PLUS and federal consolidation loans, but not those made to parents (PLUS loans). Perkins loans are also eligible if a borrower consolidates them into a FFEL or Direct Loan.
- Last thing is that the borrower must be having more debt comparing to his income to qualify for a reduced payment. For example if a borrower earns 150% below of their poverty level for their family size, then he have to $0. If they earn more then their payment will be capped at 15% of whatever their income is over that amount.
