Student Loan Payback Based on Earnings... PURE GENIUS!
"Instead of paying upfront or taking loans with repayment schedules unrelated to income, students would accept an obligation to pay a fixed percentage of their income for a specified period of time, regardless of the income level achieved. Suppose a university charged $40,000 a year in annual tuition. A standard 20-year loan in the amount of $160,000 (40,000 times four) would produce an immediate postgraduate debt obligation of $1,228.50 per month, or $14,742 per year, not sustainable at a salary of $25,000 or anything close to it. Under a smart loan program, the student could pay about 11 percent of his income, with an initial payback of $243 per month, or $2,916 per year, which is feasible at a job paying $25,000. If, after five years, the student’s salary jumped to $100,000, payments would jump accordingly and move up over time as income increases. After 20 years, assuming ordinary income increase, the loan would be paid off." Superb Idea: Student Loan Payback Based on Earnings -- GOOD
My student debt is very close to this and I have a decent job for someone my age with a Comm degree but still I don't make enough to live and pay student loans. Its the 800 pound gorilla sitting in my room. At some point its going to get up and kill me. Well this concept sounds very reasonable. I hope someone looks into it.