Student Loans

Subsidized Student Loans Haven't Worked as Advertised

Glitches and resentment limit the program's reach


In his speech at the Democratic convention, former President Bill Clinton heaped praise upon a program that the Obama administration started to help people repay their student loans. Known as "income-based repayment," it lets borrowers adjust monthly payments down to 15 percent of their income and wipe out the debt after 15 years. "No one will ever have to drop out of college again for fear they can't repay their debt," Clinton said. "If someone wants to take a job with a modest income—a teacher, a police officer, if they want to be a small-town doctor in a little rural area—they won't have to turn those jobs down because they don't pay enough to repay the debt. Their debt obligation will be determined by their salary. This will change the future for young Americans."

It's notable that Clinton talked about how many people the program would help in the future. It's actually been around since 2009. So far it hasn't worked as well as policy makers had hoped.

NEXT: Federal Money for Trails Comes With Red Tape Attached

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  1. To me it’s strange that this program hasn’t brought expected results. The idea is good and I think it was supposed to help people to pay off their student loans and no matter what their income is. Income-based student loan repayment is right because there are lots of jobs that graduates would like to get but they afraid that the income will be not enough to make payments and they will have to use payday loans in 1 hour to pay off the debt. It’s necessary to create a program which would be really effective and helped students to pay off their loans. The student loan is still a very serious problem for the American economy and it’s sad that there’s no progress and the debt doesn’t become smaller.

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