Brown says plan would make repaying college loans cheaper
Bucyrus Telegraph Forum – U.S. Sen. Sherrod Brown is touting a plan he said would make repaying college loans easier and cheaper, and make more grants available for low-income students.
Last year, the government stopped contracting with private lenders to service new student loans, instead administering all payments through the U.S. Department of Education.
However, 6 million people found themselves caught in the middle when the transition took place July 1, Brown said Wednesday.
When their loans kick in, people will have to write two checks — one to a private lender, such as Sallie Mae, and one to the government.
Brown’s plan would allow them to consolidate their payments.
Brown estimated his proposal would result in $1.8 billion in savings over 10 years — payments that would have otherwise gone to private servicers. He wants to direct these funds to the Pell Grant program, which provides grant money to low-income students and could face cuts under the proposed federal budget.
It also would help borrowers, he said. Brown said those consolidating into the federal program could save 2 percent off their principal balance and gain access to loan forgiveness in exchange for public service.
