New Initiative Eases Student Loan Burden and Encourages Entrepreneurship
Yesterday, The White House outlined a new initiative created to assist America’s student population in managing their debt and to encourage them to consider entrepreneurship as a viable career option after graduation. The program, “We Can’t Wait,” will alter the federal government’s “income-based repayment” plan, and will allow qualifying students to pay off their loans using a monthly percentage of their discretionary income as opposed to a flat monthly payment. They also might be eligible to cap their loan repayments at 10 percent of their discretionary income. Additionally, the initiative will forgive student loan balances after twenty years of repayment for those eligible for the program, as opposed to the current twenty five years. This initiative is key to allowing college graduates the opportunity to invest their time and money in other activities like starting new businesses which will create jobs and boost our economy.
The "We Can't Wait" initiative also includes a partnership between the White House and Gen Y Capital Partners, an early stage venture incubator for Generation Y founded by Scott Gerber, the founder of the Young Entrepreneur Council. Gerber noted, "America's youth are facing a crisis of epidemic proportions right now that nobody until recently had given attention to...We risk losing America's young entrepreneurs because of college student loan debt."
An article from Inc. elaborates:
Tom Kalil, the deputy policy director at the White House Office of Science and Technology Policy, says this new plan will "enable young entrepreneurs not just to get a job, but to create jobs." And Ellen Kim, a senior advisor at the Office of Investment and Innovation in the Small Business Administration, says that "reducing monthly student loan amounts can buy an entrepreneur several months of runway in terms of operating and getting businesses running."
The initiative is certainly a boon to current and soon-to-be graduates worrying about loans, especially the 1.6 million young adults that qualify for the plan, most of whom who currently hold low-paying jobs. (You can use this calculator to find out if you're eligible, based on your income, federal student loan debt, and interest rate.) A White House press release speculates that some young people could even begin saving "hundreds of dollars each month."
Continue reading the article here to find out if it’s enough.