Income-Based Repayment and College Affordability

On the heels of Kevin's excellent (and widely read) piece about college affordability, and Jill Biden's speech about the virtues of community colleges, I wanted to highlight a new policy that went into effect over the holiday weekend - Income Based Repayment. Here's a quick video explaining the concept and the policy:

Essentially, the program allows qualified borrowers to pay back their loans at a rate commensurate with their income and expenses, rather than on a fixed yearly plan. If, after 25 years of payments, the loans are still not paid, the remaining balance will be forgiven. That time frame drops to 10 years for borrowers who work in government or the nonprofit sector.

The program has received good coverage so far in the LA Times and the New York Times. It's not going to solve all our problems, or make college affordable for all Americans, but it does offer some relief from the staggering debt burden facing young Americans, and that's a good thing.