Student loans have been on the receiving end of criticism for being too complex, with some of the more senior borrowers forced to work their way through a series of steps to get back on track.
However, the Government has announced a plan to end the FHAs current student loan forgiveness program and will instead offer a new loan forgiveness system, with the aim of reducing the number of students on student loans.
The new system will be available to all borrowers and will provide borrowers with a choice of a “student loan payment plan” to make on repayment, which is similar to what is currently offered to all other students.
Borrowers can then choose to either apply for either a “recovery payment plan”, which will allow them to use their remaining payments on a repayment plan, or a “federal payment plan”.
It is understood that borrowers will not have to pay anything if they choose to take a “repayment plan” rather than the “recoverment plan”.
The Government has also said it will also offer loans to young people with high levels of debt, but will also be open to loans for borrowers with low or no income.
“The government will work to improve the affordability of student loans by making it easier for borrowers to access more affordable repayment plans, and reducing the cost of those plans for borrowers who are already struggling to pay their debts,” said Finance Minister Michael Noonan.
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