The Implications of Income-Based Repayment and Public Service Loan Forgiveness on Student Loan Debt

11 Pages Posted: 16 Aug 2014

See all articles by Jarrod Johnston

Jarrod Johnston

Appalachian State University

Ivan C. Roten

Appalachian State University - John A. Walker College of Business

Date Written: August 10, 2014

Abstract

The Income-Based Repayment (IBR) plan decreases the burden of student loan debt for borrowers with high levels of debt or relatively low incomes. For borrowers with high debt or low income, student loan debt payments are based on income instead of the amount of debt and the interest rate. The unpaid balance is forgiven after 20 years. The Public Service Loan Forgiveness (PSLF) program allows unpaid student loan debt to be forgiven after 10 years for those that work for the government, non-profit, and other charitable organizations. There are numerous benefits and drawbacks to these programs.

Keywords: student loans, education finance, government policy

JEL Classification: H52, I22, I28

Suggested Citation

Johnston, Jarrod G and Roten, Ivan C., The Implications of Income-Based Repayment and Public Service Loan Forgiveness on Student Loan Debt (August 10, 2014). Available at SSRN: https://ssrn.com/abstract=2480446 or http://dx.doi.org/10.2139/ssrn.2480446

Jarrod G Johnston (Contact Author)

Appalachian State University ( email )

Boone, NC 28608
United States

Ivan C. Roten

Appalachian State University - John A. Walker College of Business ( email )

Department of Finance, Banking, and Insurance 3066 Raley Hall
Boone, NC 28608
United States
828.262.6943 (Phone)
828.262.6612 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
178
rank
161,821
Abstract Views
848
PlumX Metrics