Borrowers earning less than $125,000 a year, or less than $250,000 a year as a couple, will be eligible for up to $10,000 in loan forgiveness.
CBS 2's Tim McNicholas dug into the plan, who qualifies and how it will affect local borrowers.
Take the Illinois Institute of Technology for example, an on-campus student there pays more than $70,000 a year, and this isn't even the most expensive school in Chicago.Tom O'Connell, of Mount Greenwood, graduated from Carthage College in 2011 with $30,000 worth of debt.He's chipped away ever since, knocking it down to $7,900, even though much of his payments went directly to interest.
Sen. Bernie Sanders called the action an important step forward, but tweeted that more needs to be done. While Sen. Mitt Romney said the plan is unfair to people who already paid their own way, and it can fuel inflation, a common belief among people who fear less debt will mean more spending."No, I disagree with that," said Northwestern University finance professor Phillip Braun."The borrowers are not going to get checks in the mail," he said."They're simply going to have their payments eliminated or reduced and that's something that affects them across time.
Braun said borrowers will need to prepare for that because if they can't pay, it could hurt their interest rate and credit.
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