Thomas F. Miles, Attorney and Counselor at Law
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Loan repayment change could help with unmanageable debt

Few people would challenge the concept that higher education is a worthy goal for American students. However, it is a fact that many of those students will emerge from college with a heavy student debt load and very little ability to repay those borrowed funds. In many cases, people in California and elsewhere struggle for years under unmanageable debt, with little hope for relief. A new change to student loan debt repayment programs may help some individuals regain stability.

The new Income-Based Repayment (IBR) program will give all federal borrowers the ability to structure their repayment efforts based on their current level of income. Prior plans offered similar terms, but only for recent borrowers. Those who have been out of college for a number of years could not take advantage of the generous terms of an IBR.

Once the plan is put into action later this year, borrowers will be able to make payments on their student loan debt that will be limited to 10 percent of their discretionary income. If they are unable to pay their loans back in full after 10 years of making those payments, the remainder of the balance will be forgiven. As the borrower's income rises, so will the monthly payment.

This and other student loan repayment plans may offer a measure of relief to California borrowers who are drowning in unmanageable debt. For many, however, additional action will still need to be taken to regain stability. Filing for personal bankruptcy is one option that can remove many types of consumer debt, thereby giving individuals the ability to focus on their remaining financial obligations, including their student loans. In conjunction with a program such as Repaye, personal bankruptcy can be part of the path out of debt.

Source:, "Proposed Student Loan Repayment Plan Would Extend the Same Income-Based Terms to All Federal Loan Borrowers", Antoinette Flores, Aug. 18, 2015

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