Pelosi: Beginning Tomorrow, Student Loan Payments Will Become More Affordable for Millions of Americans

June 30, 2009

Washington, D.C. - Speaker Nancy Pelosi issued the following statement today on a new initiative that will take effect tomorrow, July 1, that will make student loans more affordable by allowing borrowers to cap their monthly loan payments based on how much income they earn. This initiative, the Income-Based Repayment program, in conjunction with a lower interest rate on need-based student loans and an increase in Pell Grant scholarships, will help make college more affordable for millions of students.

"Our nation's economic competitiveness depends on young Americans having access to the highest quality education available, regardless of financial need. That is why it is so significant that tomorrow we are launching a new initiative that will cap student loan payments in light of a borrower's income.

"The Income-Based Repayment program will ensure that educational debt does not prevent our best and brightest students from pursuing their dreams. It also prioritizes national service by accelerating debt forgiveness for borrowers who devote themselves to public-interest careers. We need our college graduates to choose careers based on their talents and skills, rather than on the size of student loan payments.

"I am proud that the 110th Congress passed the largest investment in student financial aid since the GI Bill in 1944, the College Cost Reduction and Access Act. In addition to creating the Income-Based Repayment program, that legislation increased the maximum amount for need-based Pell Grants and slashed interest rates on need-based federal student loans. We cannot let the rising cost of education prevent the next generation of American leaders and innovators from realizing their full potential. Congress will continue to work to make education more affordable for all Americans."