Matheson Says New Student Loan Rules Aid Repayment

Press Release

Congressman Jim Matheson says new rules take effect July 1 that may help thousands of Utahns who take out, or who are repaying, college student loans. The changes were included in the College Cost Reduction and Access Act passed by Congress in 2007.

"In a tough economy and a weak job market, these new benefits will help make college student loans more affordable and therefore help more students attend college," said Matheson.

Matheson said the benefits include:

A new Income-Based repayment program that caps monthly loan payments at just 15 percent of the borrower's discretionary income;
Cheaper interest rates on subsidized federal student loans
Higher Pell Grant scholarships for eligible low- and moderate-income students

In addition, Utahns will continue to be able to enter into a new public service loan forgiveness program. College graduates—or workers of any age—who enter public service professions will have their federal college loans completely forgiven after 10 consecutive years of service and loan repayments. Eligible public servants include firefighters, public defenders and prosecutors, first responders, early childhood educators and men and women serving in the military, and more.

Matheson said 2007 data show that 35,000 Utah students took out need-based loans each year at 4-year public schools. The debt of a typical need-based student loan borrower upon graduation was $12,988.

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