Obama announces student loan change. Is it enough?
On Wednesday, President Obama announced new programs to help ease the burden of students’ college loans. His executive order is meant to help lower monthly payments and help students consolidate their government loans. In consolidation, students will be able to lower their interest rates to 0.5 percent. The plan will limit the amount of of a student loan’s monthly payment to 10 percent of a graduate’s income, which is down from 15 percent. The plan also allows outstanding debt to be forgiven after 20 years, which is down from 25 years.
This is an okay step in the right direction in dealing with this country’s big student loan debt issue, but much more help is needed. For example, if you have private loans, this doesn’t apply to you, as this only applies to federal loans. Private loans are crippling graduates right now with much higher interest rates and fewer protections than federal loans. Currently, there is nothing being done about private student loan debt.
I think that one good step, for example, would simply be to allow those with private student loans to declare bankruptcy after college instead of going into default, but currently, student loan debt is immune to bankruptcy in this country. Private loan companies shouldn’t hang these debts over the heads of the students instead of letting them start fresh by allowing them to declare bankruptcy. Why should student loan debt be any different from credit card debt? If you are a student who needs help, it’s almost better for you to pay for it with a credit card than a private loan, because then at least you can declare bankruptcy instead of going into default.
Student debt has surpassed credit card debt in this country, and could be the next big economic crisis we have on our hands. We have a whole generation of kid’s coming out of college with massive debt and unable to find a job. Many of these kids will go into default and mess up their credit for the rest of their life, which will make buying a house, car, and sometimes even getting a job that much harder, if they are able to at all. Why should a whole generation have to suffer for going to college? Our country cannot afford to let outstanding student loan debt become the next big economic crisis.
Broader student loan measures are needed as soon as possible, not just for federal loans, but for private loans and those who are already in default. We’ve had bank bailouts, we’ve had car company bailouts, but what does our generation get? Where is our bailout? We are going to be the generation that has to foot the bill for the retiring baby boomer generation. So where is our help with the student loan issue?
We don’t mind helping out our parents’ generation – they deserve everything they’ve worked for including Medicare and Social Security, but I think that I speak for most of the people still with a nice large chunk of student loan debt by saying: America, we have no problem helping you with all your new bills, but how about helping us out with ours a little too?
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[...] The White House announced this week a new plan to help students buried in student loan debt. The plan allows students to consolidate federal loans, changes the interest rate, and limits the monthly payment down to 10 percent of a student’s income. But is that enough? Our article on that is here. [...]
[...] you with all your new bills, but how about helping us out with ours a little too?[Originally posted here] Article by has written 8 article(s) for us.Post SummaryAmerica, we have no problem helping you [...]
[...] loan industry. Recently, I wrote an article here about President Obama’s newest change to the federal student loan program. As I said, there is also the issue of the many students who had to take out private loans, which [...]