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.
“It’s not just that the payment is capped for your earnings, but there is a light at the end of the tunnel,’’ said Lauren Asher, president of the Institute for College Access & Success.
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Student debt has nearly tripled since 2004, according to the Federal Reserve Bank of New York, and college students are borrowing larger amounts. And recent graduates are finding fewer job opportunities and lower or stagnant wages.
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.
A math teacher at Dayton Early College Academy, Lisa Halpin, said she looked into income-based repayment and loan forgiveness after hearing other teachers talk about it. She was able to have more than $17,000 in loans forgiven after five years of teaching at the academy.
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She said knowing that the loans would be forgiven helped get her through difficult times.
Halpin is not alone.
‘‘We hear from borrowers who are incredibly relieved to realize they can actually get their payments to a manageable level,’’ Asher said.
Asher said having options and relief in repaying student loans are important parts of the student debt picture. In just one generation, Americans have shifted from less than half of four-year graduates taking out loans to two-thirds of them borrowing — and owing more.
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.