In a press call March 18, Secretary of Education John B. King announced changes to federal student aid that UCF students will see as soon as next year.
The call was part of the recently-confirmed secretary’s College Opportunity Across America tour, during which he is travelling to several universities and colleges to hear students’ concerns about student debt, loan repayment and federal regulation of private loan companies.
The secretary detailed two new options: income-driven repayment plans and the Public Service Loan Forgiveness Program, which will equip students with better repayment options post-graduation.
Income-driven repayment plans would cap monthly payments to 10 percent of a graduate’s monthly income. Under the Public Service Loan Forgiveness Program, students who choose careers in local, state or federal government, or with not-for-profit organizations, may have their loans forgiven after 120 qualifying payments are made.
In addition to those programs, FAFSA will be available sooner in the academic year. In the fall semester, he said, it will be available by Oct. 1.
King warned that predatory private companies are duping students and graduates into paying for services that are offered by the DOE for free.
“You never have to pay to cap your monthly loan payment, you never have to pay to qualify for loan forgiveness and you never have to pay to get out of default,” King said. “If someone tries to charge you for these services, think twice.”
The DOE has taken legal action against companies who illegally use its logos in advertising. It has also worked with the Justice Department and Consumer Finance Protection Bureau to ensure borrowers don’t fall prey to these companies.
“Don’t fall victim to their schemes,” he said.
Ajita Talwalker Menon, senior policy advisor for higher education at the White House Domestic Policy Council, said eliminating predatory companies is one of President Barack Obama’s primary education concerns, as well as ensuring students and families have access to a high-quality education that does not saddle them with debt.
“More Americans are graduating from college than ever before, and many students seeking education have taken federal loans,” Menon said. “We’re continuing our focus on this and doing everything we can to support the 40 million Americans out there with student debt.”
Undersecretary of Education Ted Mitchell said the DOE has been adding tools for students and families to its website, including a college score card, which can help with decision-making about where to attend college and how much it will cost.
“We are always looking for more ideas, tools, data and information that we can put online to help people,” Mitchell said. “When I started college, I knew very little about managing my own finances and we need to be more helpful to families when it comes to financial literacy.”
According to U.S. News and World Report, as of 2011, UCF students graduated with more than $20,000 in debt. King, who is still repaying student loans taken for his doctorate in educational administrative practice, said he understands what indebted Americans feel when faced with repaying federal student loans.
“You have options and allies here at the Department and across the administration,” King said. “We’re working every day to help borrowers [manage] their debt.”
Leona Mynes is a contributing writer for the Central Florida Future.