For many Americans, paying for and living under the weight of student loans has become a way of life. The next four years are starting to look a lot more hopeful thanks to President Obama’s “Pay As You Earn” proposal and Representative Hansen Clarke’s proposed Student Loan Forgiveness Act of 2012.

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(Help Is Available to Confirm Eligibility – Click Here)

On October 25, 2011, President Obama revealed a plan which sought to reduce the amount of student loan debt Americans hold by lowering monthly payments and granting complete and partial loan forgiveness after 20 years of repayment. This plan, beginning in 2012, caps student loan payments at 10% of a borrower’s discretionary income and works very well alongside the already in place but not widely utilized federal Income Based Repayment Plan.

Public service employees have been or are continuously employed for at least 10 years in a public service occupation will have their loan debt forgiven after just 10 years of repayment, instead of 20.

With President Obama’s urging, the Consumer Financial Protection Bureau and the Department of Education have created a new “Know Before You Owe” website, with the goal to make it easier for students to understand their federal loan and aid options better, as well as their repayment terms and responsibilities.

Obama Student Loan Forgiveness

In addition, on March 8th, 2012 Rep. Hansen Clarke [D-MI13] introduced to Congress an act, supported by President Obama, called H.R. 4170 (112^th): Student Loan Forgiveness Act of 2012, which died after it was referred to the Committee. However, there’s a great likelihood that it will re-emerge in 2013.

The act’s description states that it is a bill aiming “To increase purchasing power, strengthen economic recovery, and restore fairness in financing higher education in the United States through student loan forgiveness, caps on interest rates on Federal student loans, and refinancing opportunities for private borrowers, and for other purposes.”

This specific plan sought to add to Part G of title IV of the Higher Education Act of 1965, specifically to add what he called ‘10/10 Loan Repayment Plan’, which, like President Obama’s proposal, would cap monthly payments at 10% of a borrower’s discretionary income. However, it would require an auto-debit from a checking or savings account, which some people say would be discriminatory against people who didn’t have bank accounts.

Also, this act would allow forgiveness of loans after borrowers had paid 10 years, instead of 20 years as in President Obama’s proposal, or 120 payments under the 10/10 plan, payments that were not less than they would have been under the 10/10 plan, or “payments” of $0 during a month the borrower was in deferment due to an economic hardship. Borrowers who take out new student loans on or after the date of enactment would be eligible for up to $45,520 of principal amount, fees and interest forgiven, while there would be no cap for borrowers whose loans predate the enactment.

In addition, the Student Loan Forgiveness Act of 2012 would also provide for Public Service Loan Forgiveness after 60 monthly payments instead of 120. Military personnel would have their federal student loans forgiven if they hold a degree.

All of these new and proposed measures do and would affect federal loans only, private student loans would still require repayment as usual according to the specific rules and regulations of the lenders they were borrowed from.

Are You Eligible? – Verify Eligibility Here 

(Help Is Available to Confirm Eligibility – Click Here)

Overall, it seems like the reality of making higher education more affordable is well in the works, and during the next four years we’ll likely see some big changes in how student loans are handled. Since a well-educated population is essential to our country’s success and well-being, this can reasonably be considered a very good thing.