Policy Initiatives

Student Debt Policy Agenda

Our policy agenda, updated for 2009, lays out proposed changes to strengthen federal financial aid policies and reduce the risks and burdens of student debt. We will be actively working on all of these issues in 2009.

Financial Aid Pledges to Reduce Student Debt

Students deserve to know that going to the right school does not have to mean a lifetime of hazardous debt. Some colleges and universities are changing their financial aid policies and communications strategies to eliminate or minimize student loans for low- and middle- income students. Is your school on the list?

Fair and Manageable Loan Payments

Federal student loans should help expand rather than restrict educational and economic opportunity. With broad-based support from students, parents, and college access experts, we helped design a proposal that would cap loan payments at a reasonable percentage of income, limit interest buildup, and cancel remaining debt after 25 years. This policy, now called Income Based Repayment, was signed into law on September 27, 2007, and went into effect July 1, 2009.

H.R. 2492: Real Loan Forgiveness

Both the Income-Based Repayment (IBR) and the Income Contingent Repayment (ICR) programs allow borrowers to make affordable monthly student loan payments over an extended period of time, and any outstanding balance after 25 years of repayment is forgiven. Under current law, though, the balance forgiven after 25 years of repayment is treated as taxable income to the borrower. H.R. 2492 would ensure that federal student loan debt forgiven under IBR and ICR is not taxed as income.