In the U.S. there is what is known as a ‘student loan crisis.’ It was at approximately $1.52 trillion in 2018, owed by 44.2 million borrowers. These are my cohorts. The U.S. government is now realizing that this is an economic issue, since many borrowers are delaying large lifetime purchases.
I read an article today (2/13/19) where Senator Lamar Alexander, a Republican of Tennessee suggested significant student loan reforms. Essentially the many options available to borrowers would be removed and only 2 current would remain: the standard 10 year and an updated version of the income-driven plan.
I am currently on the income-driven repayment plan, which means 10% of my discretionary income is paid towards the loan and after 25 years the remaining loan is forgiven. By the looks of this reform, it would not be forgiven after 20-25 years, meaning that those under this plan would still have a balance owed. This costs more in the long-term instead of paying it off as fast as possible. Although, I wonder if this reform would be for current borrowers or future borrowers. If it is the former than it is understandable why I am trying to pay mine off as quick as possible.