Student Loan Forgiveness Act of 2012


Student Loan Forgiveness Act of 2012

Wisdom of Forgiveness (Photo credit: Wikipedia

Student Loan Forgiveness Act of 2012

The Student Loan Forgiveness Act of 2012 is a proposal before Congress to address the looming crisis of students who are financially crippled by their outstanding student loan balances.

The bill provides full loan forgiveness for current borrowers who have paid the equivalent of 10% of their discretionary income for 10 years or who are able to do so over the coming years.  This makes forgiveness possible after 120 payments.  Here are some other key provisions:

  • Caps interest rates on federal student loans at 3.4%
  • Allows many people to convert private loans into federal loans
  • Unemployed and/or ill would also be eligible to enroll
  • Maximum loan forgiveness amount would be $45,520.00 for new borrowers
  • Current borrowers would be eligible for the full amount

Under the Public Service Loan Forgiveness Program it will decrease the number of payments by half.  Eligibility would begin at 5 years or 60 payments.

Tuition costs are outracing inflation by an unconscionable amount.  Average public tuition increased by 8.3% in 2012.  The average borrower owed $25,250.00.  The lack of opportunity for graduates has left recent graduates in an unenviable position.  Many borrow heavily in anticipation of immediate employment with at least average pay.  The scarcity of opportunity in today’s economy leaves them with debt that cannot be discharged in bankruptcy under ordinary circumstances.  Default means ruined credit, rising interest rates and compounding fees.

Those currently behind because of illness or unemployment would be eligible should this bill become enacted as written. To weigh in on this matter go to and

  1. Go to
  2. check “bills” button
  3. Click “most viewed” button
  4. Select HR 4170 Student Loan Forgiveness Act of 2012
  5. In top right check “oppose” or “support”
  6. Enter your zip code.  It will select your congressman and generate a document you can send with a click.
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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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