Everything you need to know about student debt

19 Cards

CURATED BY Libby Nelson

2014-08-27 15:08:36 -0400

  1. What is a student loan?
  2. How much student debt is out there?
  3. How much debt does the average student have?
  4. Why has student debt increased so much?
  5. 47 states spend less on college students than they did in 2008
  6. What kinds of student loans are there?
  7. How are federal student loan interest rates calculated?
  8. What colleges have the most student debt?
  9. What happens if you don’t pay back a student loan?
  10. How many people aren't paying back their student loans?
  11. Why can't student loans be discharged in bankruptcy?
  12. What is income-based student loan repayment?
  13. What effect does student debt have on the economy?
  14. Does the government make money on student loans?
  15. What's the case for student debt?
  16. What are some proposals for reducing student debt?
  17. You didn't answer my question!
  18. Where can I learn more about student debt?
  19. How have these cards changed?
  1. Card 1 of 19

    What is a student loan?

  2. Card 2 of 19

    How much student debt is out there?

  3. Card 3 of 19

    How much debt does the average student have?

  4. Card 4 of 19

    Why has student debt increased so much?

  5. Card 5 of 19

    47 states spend less on college students than they did in 2008

  6. Card 6 of 19

    What kinds of student loans are there?

  7. Card 7 of 19

    How are federal student loan interest rates calculated?

  8. Card 8 of 19

    What colleges have the most student debt?

  9. Card 9 of 19

    What happens if you don’t pay back a student loan?

  10. Card 10 of 19

    How many people aren't paying back their student loans?

  11. Card 11 of 19

    Why can't student loans be discharged in bankruptcy?

  12. Card 12 of 19

    What is income-based student loan repayment?

    Usually, a student loan payment is like a car payment: borrowers pay the same amount every month for 10 years, until the loan is paid off. Under the income-based repayment program for federal loans, borrowers pay a percentage of their discretionary income every month, until the loan is paid back or forgiven. The idea is that payments are lower for borrowers who might not be able to afford the standard repayment plan.

    Income-based repayment, also known as IBR or Pay As You Earn, is only for federal loans. Payments are based on a borrower's discretionary income, which is determined based on family size using the federal poverty guidelines. If a borrower has a household of one and an income of $25,000, discretionary income is determined by subtracting the 150 percent of the poverty guideline for that household size ($17,505). That borrower's discretionary income is $7,495.

    The exact repayment terms depend on when you took the loan out: Some borrowers pay 10 percent of their discretionary income, others pay 15 percent. If you work for a nonprofit or government agency, the loan is forgiven after 10 years. If you don't, you pay for either 20 or 25 years, or up until the loan is paid off. (But watch out — if you don't work for the government or a nonprofit, the forgiven loan could eventually be taxed as income.)

    The concept of repaying federal loans based on income in the US dates from 1992, but expanded after the federal government became the only lender for student loans in 2010. About 11 percent of borrowers are paying back their loans this way.

    Income-based repayment should prevent many student loan defaults, because borrowers don't have to make payments if they're not making money. But the enrollment process right now is complicated and can be hard to navigate. Some policy experts think that income-based repayment should be the automatic way to pay back a student loan.

  13. Card 13 of 19

    What effect does student debt have on the economy?

  14. Card 14 of 19

    Does the government make money on student loans?

  15. Card 15 of 19

    What's the case for student debt?

  16. Card 16 of 19

    What are some proposals for reducing student debt?

  17. Card 17 of 19

    You didn't answer my question!

  18. Card 18 of 19

    Where can I learn more about student debt?

  19. Card 19 of 19

    How have these cards changed?

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