FOR THE WEEK OF OCT. 31, 2011
President's college loan relief plan spurs debate: Fair or too generous?
Look for an opinion column, editorial or letter to the editor about this issue or the "Occupy" protests. Highlight a point you support.
Find other news of interest about the economy, employment or personal finance. Tell how it could affect your generation.
Now try to spot an article about a person or family affected by an economic issue. Share a quote that touches your emotions.
In a move intended to "make college more affordable," President Obama proposes new rules for government-insured student loans: Cutting interest rates slightly, limiting monthly payments to 10 percent of discretionary income (above a basic living level) and forgiving debt after 20 years (or 10 years for certain public service workers). The White House also is working on a "Know Before You Owe" project to warn about the cost of student loans.
Congress already passed legislation proposed by Obama to cap some student loan payments at 15 percent of a graduate's disposable income and to forgive the balance after 25 years. "College graduates are entering one of the toughest job markets in recent memory, and we have a way to help them save money by consolidating their debt and capping their loan payments," says Education Secretary Arne Duncan. "We want to reduce those monthly payments . . . up to a couple of hundred dollars."
Behind the politics is a stark situation with real risks. Americans now owe more on college loans than on credit cards, with student loan debt expected to exceed $1 trillion this year. Rising costs leave some college graduates in a deep financial hole. On average, Class of 2010 members owe $24,000. And a new report shows average in-state tuition and fees for a full-credit load at four-year public colleges now exceeds $8,000 per year, the highest amount ever.
President says: "I know you're hearing stories from friends and classmates and siblings who are struggling to find work, and you're wondering what's in store for your future. And I know that can be scary. This is something Michelle and I know about firsthand. I've been in your shoes." -- Oct. 27 remarks at University of Colorado
Student says: "College isn't for everyone and we need to stop selling kids on six-digit loans before telling them how unnecessary their chosen major is." -- Mark Kogan, attending American University Washington College of Law in Washington, D.C.
Critic says: "This plan is troubling and simply reinforces the culture of irresponsible borrowing. . . . It isn't fair, especially to kids who have been paying off their loans on time." -- Andrea Tantaros, New York Daily news columnist
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