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Hillary Clinton is unveiling another part of her plan to eliminate student debt: a three-month moratorium on federal student loan repayment during which borrowers could refinance or restructure their debt.
"I want everyone to be able to refinance your student loans so you never have to pay more than you can afford and for people who go into public service, and I include teaching because it is the first and primary public service," Clinton said at the National Education Association meeting in Washington. "Any remaining debt after you refinance will be forgiven after 10 years."Student borrowers could defer loan payments for three months under a reprieve she is promising to impose through the unilateral power of the presidency if she wins the election and becomes president next year. The proposal is expected to cost the federal government more than $1 billion, not because of the short hiatus but because of the lost interest when borrowers refinance to cheaper loans. Some of the cost could be defrayed by greater economic participation by borrowers, such as starting businesses or buying homes.
According to an emailed statement from the Clinton campaign,
Additionally, Clinton's plan would eliminate college tuition for working families by saying that families with income up to $125,000 will pay no tuition at in-state public colleges and universities – which would cover more than 80 percent of all families. The plan will phase in, with families earning $85,000 a year or less immediately able to attend a four-year public college or university tuition-free upon enactment. The income threshold will increase by $10,000 a year each year over four years so that, by 2021, all students with a family income of $125,000 or less will have the opportunity to receive a college education tuition-free.
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