The United States government plans to forgive $108 billion in student loan debt in the coming years, the Government Accountability Office announced last week in a report to Congress.

To do so, the government will offer income-driven repayment plans to students having trouble paying their loans.

Income-driven plans primarily provide a safety net in an otherwise stressful situation, said Mark Kantrowitz, publisher and vice president of strategy at Cappex.com, a free website for planning and paying for college.

If a student’s total debt at graduation is less than their annual income, that student will be able to back their student loans within 10 years, Kantrowitz said. But, if the student doesn’t get a good job after graduation and their debt is higher than their annual income, making every loan payment will be a struggle.

“Income-driven repayment plans is an option for making those loan payments more affordable,” Kantrowitz said. “It bases them on your income as opposed to the amount you owe. The goal should be that if you plan carefully and you aren’t able to get a well-paying job, there is a safety net and you don’t fail to completely pay your debts.”

A spokesperson from the National Association of Student Financial Aid Administrators said the recent report is alarming mainly because of how it casts a negative light on repayment plans for students.

The report may validate that “advocating for the curtailing of income-driven repayment plans,” the spokesperson said.

“While NASFAA acknowledges that it is incredibly difficult to make accurate budgetary estimates about these programs, there must be a greater level of transparency from the Department of Education in how it calculates the budgetary effects,” the spokesperson said.

Kantrowitz recommended students minimize the amount of money they borrow and only use as little as they need, not as much as they can.

Kantrowitz gave the example of financial aid awards and advised against treating it like free money because “every dollar you borrow will cost you about $2 by the time you repay your debt.”

“Debt is something that should make you feel uncomfortable, that you really don’t want to borrow the money unless you absolutely need to,” he said.

Published on December 6, 2016 at 11:33 pm

Contact Saniya: ssmore@syr.edu