H.R. 4170: Student Loan Forgiveness Act of 2012 – If you make payments equal to 10% of your discretionary income for 10 years, your remaining federal student loan debt would be forgiven; Capping interest rates at 3.4%

Representative Hansen Clarke of Michigan has just introduced H.R. 4170, The Student Loan Forgiveness Act of 2012, in the House of Representatives – legislation designed to lend a helping hand to those struggling under massive amounts of student loan debt.

Here is a summary of what the bill does:

Make student loan repayment both simple and fair -The bill would create a new “10-10 standard” for student loan forgiveness. –If you make payments equal to 10% of your discretionary income for 10 years, your remaining federal student loan debt would be forgiven.

-If you have already been making payments on your student loans, your repayment period would likely be shorter than 10 years. The amount you have already paid on your student loans over the past decade would be credited toward meeting the requirement for forgiveness.

–The bill would ensure low interest rates on federal student loans by capping them at 3.4%. o The bill would allow existing borrowers whose educational loan debt exceeds their income to break free from the crushing interest rates of private loans by converting their private loan debt into federal Direct Loans, then enrolling their new federal loans into the 10/10 program.

–The bill would reward graduates for entering public service professions like teaching and firefighting. It would also provide incentives for medical professionals to work in underserved communities. It would reduce the Public Service Loan Forgiveness requirement to 5 years from its current 10 years.