Obama Works to Reduce Stuend Loans, #4

The economy has been an issue in campaigns for a long time. Recently, there has been increasing challenges for college students to pay off their loans. As campaign season begins, Obama announces that he is going to authorize some changes in federal policy. His action will make college loans easier and more affordable to the millions of students who are trapped in their loans. The Occupy Wall Street movement actually brought this issue to attention recently. Obama will reach out to the “Occupiers” and a crucial bloc of the voting pool that could help in next year’s elections.

When Obama visited the University of Colorado’s Denver campus, he announced that he and his administration would no long wait for Congress to take action, he would. His “Know Before You Owe” plan would let some college graduates limit their federal student loan repayments to 10% of discretionary income starting in January, which is two years before the cap was going to take effect under federal law. This “pay as you earn” option could help 1.6 million low-income borrowers reduce their payments by a few hundred dollars a month, and the remaining debt would be forgiven after 20 years (five years earlier then under the current law). Borrowers with more than one loan would be able to consolidate their debt and reduce their interest rates up to a half a percentage point.

Obama says this plan has the potential to boost the economy. Student loan debt actually surpasses credit card debt for the first time ever. When people’s paychecks are going towards paying off loans instead of buying things, this not only hurts the families but actually damages the economy. The money should instead be used to feed back into the economy and help businesses grow.

I believe this is definitely a step in the right direction at addressing the huge costs of higher education. The Obama administration taking action is nice to see and I believe will influence a large bloc of people’s votes if it goes successfully. This actually increases my interest in the upcoming election more than it was before. 

Want to read the whole article?: 

http://www.washingtonpost.com/politics/obama-unveils-student-loan-relief-plan-in-denver-campus-appearance/2011/10/26/gIQAOcDNJM_story.html