Young people need more opportunities for employment and income. 5.8 million of us are burdened with student debt and once out of school, it’s a very scary reality to be unemployed and already in the negative. Making money is so easy for some people. Why isn’t it for young people? We’ve asked this question many times. We’ve complained, we’ve “occupied,” we’ve blogged, we’ve tweeted. We’ve made our discontent clear. Is the government finally listening?
Wednesday at University of Colorado’s Denver campus, President Obama announced new plans to ease student loan debt and to make the repayment process easier to understand. The plans, executed through executive order, will include an accelerated implementation of a Congress approved “pay as you earn” program that caps monthly student loan payments for borrowers with low incomes. This means that, starting in January, post-2011 college graduates can cap their federal student loan repayments at 10% of their monthly income. Also, all remaining debt will be waived after twenty years, which is five years earlier than the current law.
In addition, the government will now allow student loans from more than one federal program to be consolidated into one. So, borrowers will only have to write one lump sum repayment check instead of making multiple payments to different lenders for differing amounts. This may make it easier for post-2011 college grads to navigate bill paying in the real world, but what about undergraduates? Well, The White House will also release a “Know Before You Owe” fact sheet that will allegedly outline all of the information students need when paying for college.
According to President Obama, these new plans could save 1.6 million student loan borrowers hundreds of dollars a month, and the consolidation plan will lower interest rates in some cases. Keep in mind that these new rules only apply to federal students loans, so loans from private lenders will not apply.
I can tell you personally, the new income based plan reduces my payments from $297 to $37 a month. Additionally, I work full-time for a public service non-profit. After 10 years of monthly payments – while I’m employed full-time in public service – my entire balance of my student loans will be forgiven. This creates a huge incentive for students who want to work in public service but are hesitant due to lower salaries in that sector.
Obama’s student debt plans are meant to make school, money, and maybe just life in general easier for young people. With tuition at an all time high, according to the College Board, President Obama’s announcement this week could not have come at a better time. Only a couple of months ago, we took to the streets griping, yelling, and asking about wealth distribution and the affordability of a decent quality of life. It looks like this week, President Obama squarely acknowledged our demographic and offered an immediate token of help. It may not be every thing young people need; but hey, saving hundreds of dollars a month and being able to afford an education is definitely a step in the right direction.
Tags: Barack Obama, President Obama, student debt, Student Debt Plans, student loans
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Nicolas Hockenberry Bio: @Nhockenb Email the author at: blog(at)rockthevote.com |
America’s youth need a new start and student loans should be refinanced so they are manageable. This is a very difficult economy and many people are hurting. It is time for everyone to have access to the American dream.
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Student loans don’t get forgiven, they get tacked on to the national debt. It is called robbing Peter to pay Paul. Higher education costs have soared compared to all other costs because we continue to make lending too easy for the recourse-based loan, which puts young adults into debt slavery right out of the gate. The solution is to starev the higher education beast of its ability to outstrip the cost of living increases of any other industry.
OWS doesn’t want bankers to get handouts from the government, and I wholeheartedly agree. But in true “Animal Farm” fashion, the handouts are OK if they go to a different self-interest group. Please explain.
The answer to that question is simply this, a step in the right direction; not everything needed is on the table, but a easing of the debt burden on students is a good start.