These days, being an average student is an expensive pastime. After all, the average 2016 college graduate who took out student loans left school with over $37,000 in debt.
The picture can be even more bleak for certain majors; the average student loan debt for law school grads was $140,616 at last count, while medical students were even worse off with $161,722 in loans.
Fortunately, new programs are being introduced each year in an effort to provide these borrowers with relief. If you’re seeking student loan repayment help in 2016, the following developments might offer just what you've been searching for.
1. The Birth Of REPAYE
Introduced in 2016 as a companion to other income-driven repayment programs, the Revised Pay As You Earn (REPAYE) program opens repayment assistance up to an additional 5 million borrowers each year. Borrowers can cap their monthly student loan payment at 10 percent of their discretionary income.
As an added bonus, those on the REPAYE program can have any remaining balances forgiven after 20 years of on-time payments for undergraduate students and 25 years for graduate students.
The catch? You'll need to pay income taxes on the amount forgiven once you exit the program.
2. Student Loan Repayment Assistance Now a Workplace Perk
According to a study from the Society for Human Resources Management (SHRM), approximately 3 percent of U.S. employers have begun offering loan repayment as an employee benefit. That number will likely grow as more employers realize the need for this benefit and roll it into existing packages to attract young talent.
In fact, a recent student loan benefits survey conducted by Student Loan Hero showed that almost half of respondents valued student loan repayment over a 401(k) employer match. This kind of response shows just how important student loan help has become for young workers—and how it will transform benefits packages across the country.
3. New State-Sponsored Refinancing Options
As federal benefits are exhausted and requirements tightened for the growing number of graduates with student loan debt, more states have begun offering their own student loan refinancing options for borrowers.
For example, Minnesota is one state that launched its own program this year. With its new SELF Refi Program, Minnesota residents with student debt may be able to refinance at rates as low as 3% if they meet certain requirements. The hope with these programs is that, by providing a state-run lifeline, they can deter students from relying on private loan products that might be pricey or even predatory.
4. NYS Get On Your Feet Loan Forgiveness Program
Introduced this year to a horde of grateful students, Get On Your Feet in New York is another example of a one-of-a-kind student loan repayment benefit being offered on the state level.
While limited in scope due to the fact that it's only available to New York residents, the program offers up to 24 months of federal student loan debt relief to recent college graduates that live in the state and meet certain eligibility requirements.
5. A New President
President Obama undoubtedly made major changes to the student loan landscape during his terms. And with the 2016 presidential election underway, that means it's time for a new president with new policies to enact.
Although it's still uncertain who will ultimately be voted into office this November, the presidential candidates have shared their student loan reform plan (some more robust than others). Among those proposed changes are instituting federal student loan refinancing, reducing student loan rates, and even making college free.
Time will tell whether any of these changes stick, but for now, they have left us with plenty to think about. With average loan amounts increasing each year at a rapid pace, we would all be wise to keep watching for the legislation that might make this huge problem go away for good.