An increasing number of students are facing unplanned debt and not being able to repay their loans in full.
But there are also some students who are facing an unexpected burden: paying off a loan on a month-to-month basis.
With the average loan payment increasing by 2,000 per cent since 2010, many students are finding it increasingly difficult to meet their monthly repayment obligations, which can often add up to up to several months.
The government’s Student Loan Fairness Act has introduced some of the new restrictions, including an increase in the interest rate on student loans and new restrictions on payments made by companies like the student loan company Fannie Mae and Freddie Mac.
The changes to student loan repayments are expected to come into effect this summer, although it is not yet clear how much of an impact they will have on the overall rate of interest on student loan loans.
“The Fairness in Student Loans Act is meant to help students pay off their loans on a monthly basis, but there are some students facing unexpected burdens, such as not being allowed to repay on a loan-to, loan-out basis,” said Amitabh Sinha, the CEO of the Student Loan Credit Union.
According to the US Department of Education, the average monthly loan payment on a student loan is now $3,927, up from $2,037 in 2009.
The new Fairness of Student Loans law will require lenders to disclose the monthly loan payments received by borrowers and include a range of other disclosures to students and their parents.
The Fairment of Student Loan Payments Act also requires borrowers to make payments on time and provide proof of income, and allows borrowers to get an official statement from the company that has serviced their loans.
The government says the new rules are necessary to improve student loan repayment and that students are now more likely to be able to afford their loans once they get them.
“As student loan debt continues to increase and students struggle to meet basic financial needs, it is important that students have the ability to repay the loan on time,” said the Education Department in a statement.