The Obama loan forgiveness program exists to reduce the financial burden for students repaying their student loans: it reduces loan payment to 10 percent of qualifying incomes for a maximum period of 20 years. When evaluating eligibility for student debt loan forgiveness, the program considers students' post-graduation income in relation to the poverty line threshold; the difference between that line and their annual income creates the discretionary income, which determines the price and length of time of student loan repayments.
The loan forgiveness program evaluates income as consideration for loan forgiveness, along with other factors such as type and duration of employment. The loan forgiveness program offers 10-year loan payback plans for graduates working in nonprofit and government sectors. Regardless of initial loan amount and actual repayment towards that number made in 10 years, students working in these sectors receive forgiveness exactly 10 years after acceptance into the loan forgiveness program.
In addition to this loan program, several federal subsidies exist for offsetting educational costs. Pell Grants and direct federal loans to schools reduce tuition costs, as do federal offerings of lower interest rates. Despite offering students more affordable education, federal loan forgiveness plans draw some criticism. Critics contend the plans ultimately push the federal government into debt and unfairly reward graduates working in certain sectors while failing to help others.