College students could qualify for lower loan payments
Kamarie Schmidt recently graduated from Eastern New Mexico University and in order to pay for her degree, she had to take out student loans.
Schmidt, a native of Farwell who earned her degrees in music education and instrumental performance saxophone, said even though she is going to graduate school in the fall, paying off the loans is still an issue for her.
“When I finish graduate school, I have six months until I have to pay it off, but it’s still there,” Schmidt said.
After an executive order was signed by President Barack Obama earlier this month, Schmidt and 2,100 other ENMU students who take out loans annually, could qualify to pay off their loan at 10 percent of their disposable income. If the loan is not paid off after 20 years, the rest will be forgiven.
Before this executive order, with the Pay As You Earn program, only newer borrowers were eligible. By 2015, borrowers that took loans before October 2007 or stopped borrowing by October 2011 will be eligible.
According to government officials, an estimate of 5 million people will now qualify for the program.
Schmidt said the plan would help a lot of people, but 10 percent is still a lot for some.
“I think it will help people, but it depends on what career or job you get into. Some people, the 10 percent will still be hard to pay,” Schmidt said.
Brent Small, ENMU director of financial aid, champions the addition to the program.
“I think the program will help graduates tremendously,” Small said.
Small said it helps graduates who are underemployed or have not found a career in their chosen field.
“The program will help our students in the future who borrow, but it will not affect all that borrow,” Small said.
Small said students will have to apply for this payment plan. He thinks some students from ENMU will be eligible.
U.S. Rep. Ben Ray Lujan, D-N.M., said the executive order is an important step for helping students repay loans, according to a press release from Lujan’s office.
“A college education unlocks the doors of opportunity and it is critical that more Americans have the chance to get their degree without taking on a mountain of debt – debt that is currently holding back a generation of Americans and putting a drag on our economy,” said Lujan.
According to a White House press release, about two-thirds of college graduates take out loans with students owing an average of more than $23,000 in debt.