Although President Barack Obama’s new federal student loan repayment system recently went into effect, it will likely only begin to affect students next year.
The new pay-as-you-earn system limits student loan repayments to 10 percent of a person’s income, compared to 15 percent under current law. It also forgives the balance of students’ debt after 20 years of payments.
Jenna Robinson, director of outreach for the right-leaning John William Pope Center for Higher Education Policy, said the program will only affect students who have taken out a loan in 2012 or later — meaning it will only begin to affect people next year.
Robinson said that, while the program will provide some relief to students, she is worried about the precedent it sets for colleges, which might be more willing to increase tuition if students have more loan payment options.
She said students who obtain a low-paying job after college might lack ambition if they know a higher income will translate into more loan payments.