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Sallie Mae isn’t canceling the $50 fee, but said it will now apply the money toward the borrower’s loan balance if on-time payments are resumed for six months in a row. The change came after an online petition asking the company to drop the fee collected more than 77,000 signatures on Change.org.
By contrast, borrowers who are unemployed or suffering economic hardship aren’t charged to defer payments on federal student loans. In addition, they can apply for a program called Income-Based Repayment, which caps monthly payments at 15 percent of annual income above $16,300. Those who earn less don’t have to make any payments; any remaining debt after 25 years is forgiven, or 10 years for those entering public service jobs.
Obama is also pushing to have a change take effect this year that would cap monthly payments to 10 percent of income above $16,300. Borrowers would also be relieved of payments sooner, with any remaining debt forgiven after 20 years. That change had originally been scheduled to take effect in 2014.
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