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Obama Plans New Relief for Student Loans

Payments would cap at 10% of income next year

By Neal Colgrass,  Newser Staff

Posted Oct 25, 2011 7:31 PM CDT

(Newser) – President Obama's next plan for struggling Americans: student loan relief that could save borrowers hundreds of dollars a month, the White House says. Using his executive authority, Obama will speed up a measure that caps student loan payments at 10% of discretionary income, starting in 2012 instead of 2014. He will also order that debts be forgiven after 20 years instead of 25, the AP reports.

Further, the president will let borrowers consolidate two loans into one, if they have borrowed directly from the government and the Family Education Loan Program. Obama plans to roll out the proposal in Denver tomorrow during his campaign-style tour of Western states. His plan updates a law passed by Democrats in Congress last year, which reduced the loan payment cap and removed banks as middlemen in student loans.

US President Barack Obama waves to his supporters during a campaign event in San Francisco, California, on October 25, 2011.
US President Barack Obama waves to his supporters during a campaign event in San Francisco, California, on October 25, 2011.   (Getty Images)
US President Barack Obama delivers remarks at a campaign event in San Francisco, California, on October 25, 2011.
US President Barack Obama delivers remarks at a campaign event in San Francisco, California, on October 25, 2011.   (Getty Images)
President Barack Obama waves before departing from San Francisco International airport in San Francisco, Tuesday, Oct. 25, 2011. Obama is on a three-day trip to the west coast.
President Barack Obama waves before departing from San Francisco International airport in San Francisco, Tuesday, Oct. 25, 2011. Obama is on a three-day trip to the west coast.   (AP Photo/Eric Risberg)
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COMMENTS
Showing 3 of 117 comments
2poor
Oct 27, 2011 4:38 PM CDT
I will turn 74 years of age in Jan. 2012.  Does anyone out there in Newserland think I can get a student loan to strengthen my education?  I have a High School diploma from a rural AR school.  Do I qualify?  If yes, how do I proceed with a loan admitting me into Columbia U?  If no, why can't I get such a loan? I am serious.  I wish to go to college which I could not afford in 1955. I have never taken a dime from the government in my life and neither did my parents.  So, it is about time don't you think?
IndependentThinker
Oct 26, 2011 3:39 PM CDT
Personally I think these loans should come from the school.  Still have a max of 10% of wage earned for the repayment, drop it down to 15 years and forgive any amount left after that.  This would force schools to work to make sure their students learned well, and were placed in good jobs after they graduated.  It would also force them to higher good staff that works on teaching.  It would keep class sizes down so there would be more hands on because the school would only be able to loan out as much as they were taking in from previous students.  Of course still have it government backed so the 'minimum' (whatever the government worked out) would still be returned to the school to protect the school from of the failure (be it jobless, criminal, or death) of the student after school.
serfinWI
Oct 26, 2011 12:27 PM CDT
More voter bribes. Promising free stuff (that you can't afford) will still get votes.  I tell my kids if they were choosing a class president, one offered all they can eat free ice cream for the whole year and the other promised to work for higher math standards (more work for students), who would they vote for?

 
student loans • student debt • President Obama • Obama 2012

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