Student loan payments reduced under new federal plan

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President Obama will announce Wednesday a plan to permit some student loan borrowers to pay lower monthly payments on federally-backed loans starting next year, said U.S. Education Secretary Arne Duncan, reports the News Service of Florida. A law passed last year allows student loan borrowers to pay loans based on their earnings, with a cap of 15 percent of their discretionary income, beginning in 2014. Obama wants to push that up to 2012 and change the cap from 15 percent to10 percent. Melody Barnes, the Director of the Domestic Policy Council, said Obama does not congressional approval. Obama also wants to allow some borrowers to consolidate loans at a lower interest rate. Florida has one of the highest student loan default rates in the nation, an indication that these borrowers either don’t have jobs or are underpaid. Florida’s student loan default rates for fiscal year 2009 were 10.5 percent, an increase over 8 percent from the previous year.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including,,, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.