Millions Who May Be Eligible For College Loan Forgiveness Not Enrolled

Americans owe more than $1 trillion in student loans — a total that surpasses credit card debt — but millions who are past due on payments are not taking advantage of a program designed to make their debt manageable.

The federal income-based repayment­ program reduces an eligible borrower’s monthly payment based on income, and it forgives the loan balance after up to 25 years. Those who owe more than they earn in a year are probably eligible. And those working in public service fields, such as teachers, can have loans forgiven after 10 years.

As a result, according to a poll by Demos, young Americans are delaying important life decisions, such as buying a house (46 percent) or starting a family (30 percent). More than 1.3 million borrowers were using the repayment program as of December, according to the Department of Education. Still, about 6.7 million people were more than 90 days behind on their loans, according to the Federal Reserve Bank.

And although the program has been available since 2009, the number of borrowers defaulting on loans rose 31 percent in just two years, according to Demos. Robert Hiltonsmith, a Demos analyst, said much outstanding student debt is not in repayment yet, so the burden on young people will only grow. “It seems really clear that this is already having a huge effect on the economy,’’ he said.