SBA Chief Touts Entrepreneurship to Recent Grads in Twitter Q&ANew college graduates are facing never-before-seen student-debt levels. The White House is hoping entrepreneurship is the answer.
ByDiana Ransom•
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As graduation season approaches, SBA Chief Karen Mills thinks you should consider entrepreneurship.
For recent grads who may not have a job waiting on the other end of that diploma, entrepreneurship offers a number of benefits -- not least of which involves a chance to erase some of your student-loan debt. Starting this year, young entrepreneurs can take advantage of the Income-Based Repayment (IBR) Plan, which supports young college students that are looking to start a business, join a startup or work in the public service by making Federal student loan repayment manageable.
President Barack Obama first announced the student loan-forgiveness program in October of last year. Under the plan, borrowers' payments would be capped at 10 percent of their discretionary income -- that is a person's income after accounting for other living costs. The new measures would also shorten the forgiveness timeline to 20 years from 25 years. So, if someone had $100,000 of federal loans and earned an annual salary of $30,000, that person's monthly payment might amount to $1,150. Through the program, that borrower would pay just $116 a month, and, after 20 years, the leftover debt would be forgiven.
"By using a sliding scale to determine how much you can afford to pay on your Federal loans," says Mills of the U.S. Small Business Administration, the IBR program is "empowering [young people] to take risks with new opportunities like starting a small business."
If you still have more questions about the program -- and it's likely you will as recent stats show that student loan debt outpaces credit card debt these days -- check out this story fromEntrepreneur.com"White House Alleviates Student Loans for Entrepreneurs." But also send in your questions to Mills and the U.S. Department of Education Secretary Arne Duncan. They're hosting a Twitter Q&A today at 2pm EST. Submit your questions and follow the conversation on Twitter using the hashtag#GradStartup.
Would student loan-easing options help you start up?Leave a comment and let us know.
