Many graduates had to take from tens of thousands to hundreds of thousands in FAFSA loans to earn their degrees. The current system for repayment is broken.
We want a cap on how much interest ANY person's student loans can accrue in total, based on a percentage of how much was loaned.
Example of current system:
$200,000 Stafford loan @ 6.8%
Option 1 ~$2300/mo x 10 years. Total paid ~$276,200
Option 2 ~$1390/mo x 30 years. Total paid ~$416,400
Option 1 is not affordable.
Option 2 requires you pay $216,400 in interest alone.. over 100% of what was borrowed.
Capping:
$200,000 loan @ 50% cap = $300,000
~$1250/mo x 20 years
A lower cap can be used for 10-year loans. In the example above, a 50% cap reduced the pay off time by 10 years while still lowering monthly payments.