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The first federal initiative
In 1958, the initiation of the National Student Loan program aimed at enhancing access to higher education took place. During the Cold War, the first federal student loan initiative to enhance science, mathematics, and engineering skills was established under the National Defense Education Act. -
Higher Education Act
Through the Guaranteed Student Loan program, the Higher Education Act of 1965 not only expanded access to higher education to a wider population but also established a novel dynamic between the federal government, banks, and college campuses. -
Sallie Mae/Private Loans
The reauthorization of the Higher Education Act resulted in the creation of the Student Loan Marketing Association, also known as Sallie Mae. -
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Direct loans
In order to address the concerns stemming from modeling student loans on mortgages, the enactment of the William Ford Direct Student Loan program, commonly referred to as the Direct Loan Program, took place in 1992. -
Income-Contingent Repayment Plan
For qualified borrowers, the Income-Contingent Repayment Plan (ICR) offered capped payments that were determined to be either 20% of their discretionary income or fixed payments for up to 12 years, whichever was lower. -
Income-Based Repayment Plan
By implementing the Income-Based Repayment Plan (IBR), borrowers could have their remaining loan balances forgiven and experience a reduced monthly payment cap of only 15% of their discretionary income after 25 years. -
Pay As You Earn program
Even now, numerous borrowers rely on the existing guidelines that establish a maximum limit of 10% of discretionary income for repayments and offer loan cancellation after 20 years. -
The Biden Plan
Granting up to $20,000 in debt relief, the federal student loan forgiveness plan was announced by the Biden administration.