Graduation season is right around the corner and to help grads that are looking to start a small business, SBA and the U.S. Department of Education will host a Twitter Q & A Session on April 25 at 2pm EDT connecting soon-to-be grads or recent grads to resources to help them startup, succeed and create an economy built to last.
I, along with U.S. Department of Education Secretary Arne Duncan, will answer your questions about starting a business and highlight the Income-Based Repayment (IBR) Plan, which supports young college grads that are looking to start a business, join a startup, or work in a public service job by making Federal student loan repayment manageable. IBR helps to keep loan payments affordable by using a sliding scale to determine how much you can afford to pay on your Federal loans—empowering you to take risks with new opportunities like starting a small business.
Submit your questions now and follow the conversation on Twitter using the hashtag #GradStartup.
What: Twitter Q&A Session: Connecting Grads to Resources to help them Startup with SBA Administrator Karen Mills and U.S. Department of Education Secretary Arne Duncan
When: Wednesday, April 25 from 2:00pm–3:00pm EDT
Where: Follow the Q & A on Twitter and submit your questions now, hashtag #GradStartup
– Karen Mills
Karen Gordon Mills is the Administrator of the U.S. Small Business Administration.
Secretary Duncan at South High School. Official Department of Education photo by Leslie Williams
Secretary Duncan travelled to the Minneapolis area last Friday to host two town hall meetings with teachers, parents, students, and national, state and local leaders. Arne started the day speaking with students at South High School in Minneapolis about the importance of higher education and college affordability. “College isn’t just for the rich or someone else,” he said. “We need to raise expectations so all students know college is within their reach.”
The Obama Administration has taken extraordinary steps to make it easier for students to get financial aid and understand the true cost of college, including:
The biggest investment in college since the G.I. Bill
Duncan also announced the launch of the @FAFSA Twitter account, and explained how important it is that students fill out the FAFSA. For many students who think that higher education is out of reach, the FAFSA will explain many of available aid and loans that can help a student pay for college.
(Official Department of Education Photo by Joshua Hoover)
“My chief message today is a sobering one,” said Secretary Duncan yesterday at the annual Federal Student Aid conference in Las Vegas, Nev. “I want to ask you, and the entire higher education community, to look ahead and start thinking more creatively—and with much greater urgency—about how to contain the spiraling costs of college and reduce the burden of student debt on our nation’s students.”
Duncan called for a national conversation on the issue, and noted that containing the cost of college and student debt will always be some of the most controversial and thankless work in all of higher education. He went on to explain that:
With higher productivity and better accountability, institutions of higher education can boost both quality and access and constrain costs, all at the same time. In the era of the knowledge economy, the urgency of controlling college costs is not at odds with the urgency of increasing college attainment. Both goals are necessary if society is to do all it can to help more Americans succeed and thrive in the global job market.
Duncan acknowledged that for too many students and families that the cost of college is a serious and growing problem. He pointed out the Obama Administration’s unprecedented commitment to helping students pay off their student debt, including the recently announced Pay As You Earn proposal to help make student loan debt more manageable. “All told, federal support for increased college access has expanded more in the last three years than at any period since the years following the passage of the GI bill,” the Secretary said.
To those in attendance at the conference, Secretary Duncan called for creativity and a commitment to help contain the growth of college costs and student debt. “Our students deserve no less,” he said.
Arne took time last week to answer a couple of questions he received on his Facebook page. Daniel had a question on the Income-Based Repayment (IBR) program and the President’s recent pay-as-you-earn proposal. Secretary Duncan encouraged Daniel and others with student loans to look at switching to the current IBR program. “Depending on your income, you could save literally hundreds of dollars every single month,” he said.
You can get an estimate of how much you could save by visiting our IBR page, and check out our IBR calculator that will give you an idea if IBR will lower your monthly payments.
Arne also responded to Lesley who left a great comment about her success as a community college student. Lesley, who now has her doctorate, talked about the power of education and how it can change lives.
“Community colleges, I continue to believe, have this ability to transform young people’s lives, adults’ lives, [and] older people’s lives in very profound ways,” Duncan said. He also highlighted the Obama Administration’s unprecedented commitment to community colleges, including the proposed American Jobs Act that would provide $5 billion for renovation and upgrades to community colleges across the country.
In this globally competitive, knowledge-based economy, higher education has never been more important. Simply put, America cannot lead in the 21st century without the best educated, most competitive workforce in the world. Nations that out-educate us today will out-compete us tomorrow, which is why some form of higher education is an absolute must.
We also know that college costs have never been higher — or more difficult to manage. The Administration has already provided aid to millions of students with historic investments in programs like Pell Grants and the American Opportunity Tax Credit. But we realize that many borrowers are struggling to both pay off their loans and make ends meet every month. And fear of being saddled with debt in the long run may deter many potential students from enrolling in college. They need help now.
That’s why today, President Obama announced new efforts to make college more affordable by helping millions of borrowers better manage their federal student loan debt. We’re taking executive action with two measures that will bring relief to borrowers by lowering their monthly loan payments — at no cost to taxpayers.
First, for some students we are proposing to cap student loan repayment at 10 percent of a borrower’s discretionary income, starting next year. For many who worry about managing their debt while working in lower-paying fields — including teachers, nurses, public defenders, and social workers — this could reduce their payments by hundreds each month.
We also want to provide immediate relief to borrowers already repaying their loans. While the pay-as-you-earn proposal would only apply to some current students and recent graduates, millions more borrowers may already be eligible for our current income-based repayment plan, which caps payments at 15 percent of a borrower’s discretionary income. We know there are folks who are struggling in repayment now — and for them the current Income Based Repayment (IBR) plan may be a great option. To learn more about this plan to see if it makes sense for you, visit www.studentaid.ed.gov/ibr.
Second, beginning in January we will offer 6 million borrowers the chance to consolidate their loans and reduce their interest rates. Currently, these borrowers are repaying loans from two different programs, requiring them to submit separate payments and adding red tape that makes them more likely to default. Our special consolidation plan will allow these borrowers to make a single payment each month, with incentives to encourage on-time repayment. Borrowers who take advantage of this option will be eligible to receive a reduction in the interest rate on some of their loans by up to 0.5 percent, lowering their monthly payments and saving hundreds in interest. We will start reaching out to eligible borrowers in early 2012 to introduce them to this program.
In addition to these steps, the Consumer Financial Protection Bureau and the U.S. Department of Education have teamed up to launch a new Know Before You Owe project, and today they are releasing a Financial Aid Shopping Sheet — a draft model financial aid disclosure form. This form is a tool that colleges can use to help students better understand the type and amount of aid they qualify for, and will allow potential students to easily compare aid packages offered by different institutions.
The form will also make the total costs — and risks — of a student’s loans clear before enrollment, by outlining what a student’s monthly loan payment would be and providing an estimate of their total loan debt. Ultimately, this provides students and their families with useful information that can help them make a more informed decision about where to attend college and better understand the debt burden they may be left with.
These are changes that will make a big difference in the lives of college students and recent graduates entering one of the toughest job markets in recent memory. We’re helping provide them with key information on the front end, and we have a way to help them save money by consolidating their debt and capping their loan payments. And all of this will be done at no cost to taxpayers. This is not just a no-brainer – it’s the right thing to do.
Arne Duncan is the U.S. Secretary of Education and Melody Barnes is the Director of the White House Domestic Policy Council