Last week, President Barack Obama announced his plan to cap federal student loan repayments at 10 percent of discretionary income. After 20 years, the debt will be forgiven.
The Income-Based Repayment plan would help students in the long-term, but reports say it will also make an impact now. The White House estimated it could help up to 1.6 million people, reducing monthly payments by a couple hundred dollars.
The change in policy toward student loan repayment stemmed directly from an online petition on the White House website, which garnered about 32,000 signatures.
Up to this point, federal student loan repayment was capped at 15 percent of discretionary income for 25 years.
By addressing the issue of student loan debt âÄî which USA Today reported will exceed $1 trillion this year âÄî Obama shows he is paying attention to what Americans are worried about. HeâÄôs looking for a way to ease the burden of increased tuition and a sluggish economy. The decrease in monthly payments offers some immediate relief to those who use the program.
According to the White House, about two-thirds of college graduates used loans to help pay for school. The average borrower owes more than $23,000. For graduates who enter low-paying jobs or canâÄôt find work, the burden can be debilitating.
The plan is a good step in the right direction. But with societyâÄôs emphasis on the need for higher education, this should just be a first step.
The answer to affording college shouldnâÄôt be forgiving student loans because it shouldnâÄôt require that amount of debt in the first place.