President Barack Obama and lawmakers in Congress are debating how to address the issue of rising student loan debt, something experts say is contributing to the widening between the rich and everyone else. Some of the proposals:
— Obama has proposed extending the "pay-as-you-earn" repayment plan to all student borrowers. The program limits student loan payments based on income but is currently only available to borrowers who took out loans after October 2007.
— Sen. Elizabeth Warren, D-Mass., has proposed allowing people with high-interest student loans to refinance at today's 3.86 percent rate and would pay for it by raising taxes on the wealthiest Americans.
— Sen. Kirsten Gillibrand, D-N.Y., introduced the Federal Student Loan Refinancing Act in May to allow borrowers that received loans under the Direct Loan or Federal Family Education Loan program after July 1, 2006, to consolidate them into one with an interest rate of 4 percent or less. Instead of paying more than $47,600 over the life of a 20-year, $26,000 loan, the borrower would pay $37,800.
— Rep. Frederica Wilson, D-Fla., introduced the Student Loan Borrowers' Bill of Rights Act, which would remove educational loans from the list of debts that can't be discharged in bankruptcy.
Continue reading this story on the...