Obama’s Executive Order on Student Loans


In June of this year, Obama signed an Executive Order on student loans, aimed to provide some much-needed debt relief to borrowers. 

Since then, there have been many complex articles written about the topic, but what you need to know is actually quite simple.

All things considered, it’s all good news. It’ll either improve your student debt repayment situation, or have no effect for you whatsoever.

Read on for my must-know’s on this historic event!

5 Student Debt Must-Know’s

  1. If you qualify for the Income Based Repayment program now, you will qualify for the Pay As You Earn program in December 2015.
  2. The Income Based Repayment (IBR) program caps your payments at 15% of your discretionary income and forgives the remaining balance of the loan after 25 years of qualifying payments.
  3. The Pay As You Earn (PAYE) program caps your payments at 10% of your discretionary income & forgives the remaining balance of the loan after 20 years of qualifying payments .
  4. Discretionary income = your income minus 150% of the poverty line divided by 12 monthly payments.
  5. It doesn’t take effect until December 2015!

5 More Student Debt Facts

  1. Parent PLUS Loans do not qualify for either IBR or PAYE.
  2. Private loans presently do not qualify for any federal programs, including IBR & PAYE.
  3. Neither program takes your cost of living into account.
  4. Just because you qualify doesn’t mean you should take advantage of it. *
  5. These aren’t the only programs available. There are over a dozen deferments & forbearances. You may presently qualify for the Income Sensitive Repayment program program, or an temporary Interest Only one.


*Please note, you do not have to consolidate to qualify for the income driven repayment plans, but you may need to consolidate to qualify for the Public Student Loan Forgiveness program.- – –

In sum, if you need some help figuring out how Obama’s Order applies to your student debt portfolio – or just need to be pointed in the right direction – schedule a free consultation with me by clicking here

Together, we’ll go over your options and rights, and make sure you’re headed in the right direction!





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