While student loans are and should be seen as an investment in the future, they can sometimes feel like more of a gamble. When borrowing, students typically don’t know what their first job out of college is going to be or what it’s going to pay. So when students take on debt in college, they’re banking on a future job that will pay them enough to keep up with their living expenses, loan payments, and interest. This decision carries many risks, and it’s one of the first financial decisions many young adults make.

The new proposed federal repayment plan will allow borrowers to make payments that work with their budget, and as long as they stick to their repayment plan, they can prevent unpaid interest from snowballing and creating a mountain of debt. This gets to the root of the problem that millions of borrowers are currently facing and ensures that students who are making on-time payments are working their way out of debt — not burying themselves further in it. 

This option will allow students to accept loans with greater confidence in knowing that they’ll be able to pay back what they’ve borrowed no matter what their future income may be. It takes some of the uncertainty out of borrowing, and I believe it will empower students more than ever to invest in their education and their futures.

And as the federal administration continues to support the expansion of Pell Grants, reduced costs of college, and greater accountability for universities raising tuition, a college education is likely to become more accessible, especially for low and middle-income families. In the future, we may see students taking on fewer loans, and when they do, they’ll have the resources and confidence to borrow safely and smartly.