Cross-posted from the Department of the Treasury ‘Treasury Notes’ blog.
In today’s global economy, a higher education is one of the most important investments students can make in their own futures. But for too many lower and middle-income families, this essential rung on the ladder to opportunity is slipping out of reach as tuition continues to rise, and more students than ever are relying on loans to pay for college.
As the President takes further steps today to make a college education more affordable, there are now more tools available to help students and families manage their debt.
The Obama Administration is working to make college more accessible and affordable. As part of these efforts, the Treasury Department and the Department of Education teamed up with Intuit Inc. during the 2014 tax season to launch a pilot program to raise awareness about income-driven repayment plans with millions of tax filers. The pilot resulted in nearly 100,000 clicks by individuals taking action to visit the Department of Education’s Repayment Estimator website and evaluate their repayment options.
Users of Intuit’s TurboTax service were able to determine their eligibility for lower student loan payments based on their income by connecting to the Repayment Estimator. Income-driven repayment plans allow borrowers to fully repay their student debt on a sliding scale that adjusts monthly payments based on factors like changing income and growing families. These tools are helping lower and middle-income families pay their debts and avoid default.
The partnership helped spread the word about tools available to borrowers. Intuit’s research suggests that many of its TurboTax online customers have student loans and many may not be aware of Department of Education’s loan repayment options. Building on this collaboration, today the White House announced an expanded partnership with Intuit and a new partnership with H&R Block to reach even more individuals who could benefit from income-driven repayment options, both during tax season, and beyond.
President Obama has said, “Higher education can’t be a luxury — it is an economic imperative that every family in America should be able to afford.” As part of our mission of promoting economic growth and job opportunities, the Treasury Department will continue to explore ways to help student borrowers responsibly manage their debt.
In addition to the Repayment Estimator, the Department of Education offers federal student loan borrowers several repayment options and loan counseling tools to help students and families make informed decisions on financing a college education.
Melissa Koide is the deputy assistant secretary in the Office of Consumer Policy at the U.S. Department of the Treasury.