It’s no secret that college can be extremely expensive. With the steady rise of tuition it’s not surprising that paying for an education can take months, years, or even decades.
Some students who are unable to fully support themselves financially are forced to take out student loans in order to fund their education. These loans, although a blessing, can also be a curse.
According to the Federal Reserve, Americans owe more than $1 trillion in student loans. This number is higher than the amount that Americans owe in credit card debt. This debt makes it especially difficult for students when it comes to making large purchases, such as buying a home or a car.
On Wednesday, Oct. 26, President Barack Obama spoke at the University of Colorado and announced his plan to make college more affordable by taking executive actions, since Congress is not working the way it should.
The president aims to lower student loan debt and the problems associated with it.
“First, for some students we are proposing to cap student loan repayment at 10 percent of a borrower’s discretionary income, starting next year,” read a blog on the White House website. Also, if you cannot completely pay off your student loans after 20 years, the debt will be forgiven.
This is both a five-year and five percent decrease from the current policy.
The second part of the president’s executive actions will allow the current 6 million borrowers who have both a Federal Family Education Loan and a Direct Loan to consolidate their debts into one government loan and lower their interest rates starting in January.
“Our special consolidation plan will allow these borrowers to make a single payment each month, with incentives to encourage on-time repayment,” reads the White House blog.
In addition, the president wants to introduce a “Know Before You Owe” program that will better inform students when it comes to accepting various student loans. They will be able to see what type of payments they will have to make and which student loan best fits their financial situation.
These changes are not only beneficial to future college students but to current students as well. The changes also will have no effect on taxpayers. It’s basically a win-win situation.
President Obama’s executive orders are most definitely going to help fix the current problems that accompany student loans. These orders lower the economic hardship that most students will face after graduation. The orders also decrease the amount of years that students could potentially be in debt.
Paying for your education should not be difficult and students should not be discouraged from attending college.
The implementation of the president’s orders will hopefully alleviate the financial burden placed upon students and their families. After graduation, the last thing a student needs to worry about is a mountain of debt.
Pay off your loans quicker with Arselia at agales@asu.edu
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