Amid US student loan tussles, more seek 'forgiveness'
By Susan Heavey, ReutersWASHINGTON -- Elbot Carman, a 25-year-old aspiring graphic designer, made so little money after earning his master's degree last year that the U. S. government now says he can hold off making payments on his school loans.
May 10, 2012, 11:23 am TWN
Carman owes US$140,000 in a mix of government and private student loans. Last year he earned US$12,000.
“That was so low that they are not requiring me to make a payment this year,” said Carman, who works a paid and an unpaid internship and recently moved back in with his mother in Lawrenceville, Georgia to cut costs.
Carman signed up for a government program that helps indebted students by limiting what they owe each month and, for some, forgiving their remaining balance after 10 or 25 years.
He is not alone. As U.S. lawmakers consider how to keep interest rates on certain student loans from escalating, a growing number of students have sought help through a bipartisan 2009 initiative. In less then three years, more than 675,000 borrowers have signed up, according to the U.S. Department of Education.
Educators and policymakers also are looking for new solutions to a mountain of student debt that has reached the US$1 trillion mark. With a Nov. 6 presidential election looming, both President Barack Obama and his presumed Republican challenger Mitt Romney have targeted student loans as a growing problem for American families and the struggling U.S. economy.
The average undergraduate leaves school today owing nearly US$29,000 and graduate students owe about US$44,000, according to an analysis by Mark Kantrowitz, publisher of the popular education financing websites FinAid.org and Fastweb.com.
Interest rates on subsidized federal Stafford student loans, one of the main loans available to students, are set to double on July 1 unless Congress steps in to prevent it. On Tuesday, Senate Republicans blocked a White House-backed bill that would end a tax break for the wealthy to fund an extension of the lower rates, paving the way for possible compromise.