There are other threads that deal with this bill (information about which can be found here: http://www.huffingtonpost.com/2012/06/15/student-loan-forgiveness-act_n_1601271.html), but none that focus specifically on the interest rate cap. I highly doubt the bill will pass in anywhere near its present form because of the lenient terms of loan forgiveness (although it isn't indicated in that link, as I've read elsewhere, that total forgiveness would be capped at $45k/person).
But the interest rate cap at 3.4% has some real potential to ease people's debt burdens without de-incentivizing making payments. 3.4% rates would allow people just out of school/residency to treat the loan more like a low-rate mortgage at today's rates, and not have to put everything into aggressively paying off 6.8-8.5% loans (Stafford and Grad PLUS) while they're starting a family/at the bottom of the career ladder/preparing for retirement, etc. And it seems like as long as grads have total education debt exceeding their annual income, they'd also be eligible to get a loan at 3.4% to pay off this higher interest rate debt. Everything I've read seems to indicate that the 3.4% interest rate cap would apply to all federal student loans, including those to graduate and professional students. Can anyone confirm or deny this? And, for the fun of speculation, how likely do you think this cap is to be implemented through some bill, even if the remainder of this bill is scrapped?
But the interest rate cap at 3.4% has some real potential to ease people's debt burdens without de-incentivizing making payments. 3.4% rates would allow people just out of school/residency to treat the loan more like a low-rate mortgage at today's rates, and not have to put everything into aggressively paying off 6.8-8.5% loans (Stafford and Grad PLUS) while they're starting a family/at the bottom of the career ladder/preparing for retirement, etc. And it seems like as long as grads have total education debt exceeding their annual income, they'd also be eligible to get a loan at 3.4% to pay off this higher interest rate debt. Everything I've read seems to indicate that the 3.4% interest rate cap would apply to all federal student loans, including those to graduate and professional students. Can anyone confirm or deny this? And, for the fun of speculation, how likely do you think this cap is to be implemented through some bill, even if the remainder of this bill is scrapped?
