Miller Statement on New Student Loan Consolidation Efforts by the White House
WASHINGTON, D.C. – U.S. Rep. George Miller (D-CA), senior Democrat on the Education and the Workforce Committee, issued the following statement regarding President Obama’s plan to allow student loan borrowers to consolidate certain loans made under the Federal Family Education Loan Program into the Direct Lending (DL) program. The savings from this consolidation will be used to support and improve the repayment programs under the DL program.
Miller is the original co-author of the College Cost Reduction and Access Act of 2007, which created the Income Based Repayment (IBR) option allowing student loan borrowers to cap their monthly loan payments at just 15 percent of their discretionary income, based on their family size. Miller later authored the Student Aid and Fiscal Responsibility Act of 2010, which strengthened IBR by creating new provisions that would lower and cap monthly loan payments at just 10 percent for new borrowers after 2014, making the loan more affordable. The President announced plans to offer comparable benefits to current students and recent graduates sooner, allowing them to cap their monthly loan payments at 10 percent starting next year, and forgiving the balance of their debt after 20 years of payments. All of these benefits come at no new cost to taxpayers.
“This announcement comes at a critical time for students and their families in this economy. President Obama’s decision will provide real relief to student borrowers who are in or about to enter a challenging job market. Loan payments are obviously a major concern for recent graduates, especially when their salaries aren’t what they thought they might be. IBR has been a successful and reliable program for many borrowers, and now, with these improvements, it will be even more effective for the students and recent graduates who need this repayment option the most.”