Barack Obama takes aim at student loans.
By Ashley B. Charles
Western Sun staff writer
As college costs increase and salaries remain stagnate, it is becoming harder for students to earn their degrees. President Obama is making it easier for college graduates to repay their student loans under a new “Pay As You Can” program.
The plan will allow 1.6 million current college students with direct government and government-backed private loans to put a maximum of 10 percent of their monthly income towards repayment at a decreased interest rate. It also aims to forgive outstanding debt after 20 years, instead of 25 years.
Speaking at the University of Colorado at Denver, where he formally introduced the plan, Obama recalled when he asked Congress a year ago to make it easier for college students to afford and earn their degrees. Rather than wait on legislature, Obama is churning out this plan amongst others in his “We Can’t Wait” stimulus effort.
“That law is scheduled to take effect by the time freshmen graduate, but we decided, ‘Let’s see if we can do a little bit more.’ So today, I’m here to announce that we’re going to speed things up,” Obama said to a cheering crowd of students.
“We’re going to make these changes work for students who are in college right now,” he said. The changes could go into effect as early as January 2012.
In addition to the lower monthly payments, Obama said, “We’re going to make it easier for you to have one payment a month at a better interest rate.” The new interest rate could be as low as one-half percent and consolidate multiple payments to various loan agencies.
Paloma Ocampo, a second-year social work major at GWC is looking for the most affordable way to pay for college and expenses.
“I was always advised by my family to not take loans out,” she said citing that debt is a fear of hers. “I want to work my ultimate hardest to not take any loans out.”
Most college students look to exhaust all other financial aid and scholarship opportunities before applying for loans. “Pay As You Can” balances out to have graduates paying a couple hundred dollars per month.
