Reinstate the Affordable Loans For Any Student Act!

Reinstate the Affordable Loans For Any Student Act!

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Jesse vega started this petition to Representative Robert C. Scott and

“Everyone has the right to education.” This is a basic human right. However, as of 2018, according to Student Borrower Protection Center, also known as SBPC, more than 44 million people owe a collective of $1.53 trillion in student loan debt. This is due to the constant increase in the cost of college tuition. Public universities have raised their tuition costs from $8,730 to $21,730 for a single year of college, ultimately requiring more college students to take out more loans.

Betsy DeVos claims that the reason institutions keep raising the cost of college tuition, is because more and more students are taking out loans, but as they raise the tuition, more students take loans out to help pay for their education. We, as college students, see this as a huge scam. If they keep raising the cost of college tuition, more students are going to take out loans to help pay the higher costs, thus creating a never ending cycle of debt. The biggest problem with loans is not fully understanding how and which repayment plans to continue under.

Everyone deserves the right to gain a higher education. More and more jobs are looking for people who have college degrees such as: Engineering, architecture, mangers, medical related, etc. If we don’t fully understand how to repay our student loans, we can’t pay them back which then causes the loss of licences, we can fall under delinquency, and even have to dropout of more school.

That is why a National Association of Student Financial Aid (NASFAA), introduced the “Affordable Loans For Any Student” (ALFAS) act in 2018. As NASFAA stated, the purpose for this act is to “tackle issues related to student loan affordability, complexity, and consumer information.” This act would make changes to the repayment plan for borrowed loans. As some know, there are 8 types of repayment plans that contain all kinds of requirements, making it hard to understand. The ALFAS act would consist of only two payment plans.

1) The standard ten year repayment plan and,
2) An IBR plan, that requires a student to pay only 10% of discretionary income with forgiveness after 20 years.


This first step will greatly reduce any repayment plan confusion. The second step would be to end interest capitalization and origination fees. Interest Capitalization is the interest that has built upon unpaid loans that become part of your regular loan. It takes what you haven’t paid, adds it to what you are already paying, and your loan continues to have interest. Origination fees are a specific amount you have to pay in order to take out the loans in the first place. Since many private lenders don’t charge for origination fees, why don’t we eliminate this process for student loans. 

However, it seems that this act has become inactive. Please help us to reinstate the Affordable Loans for Any Student act legislative bill for students all over the world suffering from student debt and the confusing repayment plans. ALFAS can help lower student debt and make it much easier for future graduates!

 

Citations

Betsy DeVos

NASFAA

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