UPDATE: Gov’t launches new website for student loan borrowers

The Department of Education has launched a new website to help people with student loans find a repayment option that best suits their needs.

The move is part of an effort the Obama administration is undertaking to enroll an additional 2 million people into repayment programs such as the Pay As You Earn program, which caps monthly student loan payments at 10 percent of income.

Federal student loan debt exceeds $1.3 trillion, and about one in seven borrowers default on their loans within three years of beginning to repay them.

Dennis Hopson, a financial adviser with Edward Jones in Salisbury, says rather than borrowing money, people are better off saving beforehand when it comes to college.

He recommends everyone to have a Roth IRA, which is an Individual Retirement Arrangement.

“Beyond the Roth IRA, the next best thing is a 529 plan,” Explains Hopson. “That’s an education savings plan that anyone could contribute to so the parents could contribute to it, the grandparents, friends. It’s a good option too.”

The Government Accountability Office found last year that many eligible borrowers don’t participate in the income-based repayment programs, in part, because the department doesn’t consistently notify them of their options.

The new website is StudentLoans.gov/Repay.