President Barack Obama has announced a proposal to increase college affordability in attempt to placate students, who have been graduating from college with ever deeper piles of debt. A $10,000 tax credit will be given to families for four years of college, federally issued Pell Grants will increase, federal loan repayment plans will be capped at 10 percent of the borrowerâÄôs income and debt will be forgiven after 20 years of payment, or 10 years if the borrower has chosen a career in public service. In addition, a bill stalled in the U.S. Senate would bolster these efforts by ending federal subsidies to private lenders. The government will redirect this money âÄî saving roughly $87 billion over 10 years âÄî toward education initiatives such as the increased student aid. If both programs pass, they amount to a massive federal reform of student lending. Most if not all loans would be federally issued, and the income-based repayment plan could make loans far less burdensome. The Los Angeles Times reports that the expansion of the Pell Grant program to $35 billion would mean that Obama has increased funding to low- and moderate-income families by 92 percent since taking office. According to research from the University of California, Berkley, there have been numerous audits and investigations of both direct and guaranteed student loans during the past 10 years, and in every case, auditors have agreed that direct federal lending is more cost-effective. In fact, the study found that the money wasted on private lenders would be enough to fully fund the No Child Left Behind Act, give every low-income college student an additional $4,000 grant or save more than $15 million every day. These programs, in tandem, would greatly assist both low- and middle-income students crippled by their student loans. A Forbes article explains that under ObamaâÄôs new plan, a borrower with an adjusted gross income of $30,000 who owes $40,000 could see a difference of $115 a month, based on 10 percent of his or her income, or up to $460 a month, assuming a fixed 6.8 percent interest rate. The savings that amount could be huge. In fact, the savings could provide an economic stimulus on their own. Instead of being enslaved to debt, these borrowers could instead become a powerhouse buying bloc. For many graduates, the idea of buying a home seems like a distant dream, but as Susan L. Travis wrote in the Huffington Post, âÄúMoney left in the pockets of the educated class finds a direct path to entrepreneurial business investment, mortgage payoffs and the resolution of other debts, all of which ultimately regain consumer credit strength.âÄù This reform is crucial to studentsâÄô well-being, and at the local level, students at the University of Minnesota would be greatly affected. Undergraduate tuition and fees at the College of Liberal Arts have more than doubled since 2000 âÄî a statistic representative of increases seen at many colleges and universities. So it comes as no surprise that, according to the Project of Student Debt, the average student at the University graduates $23,811 in debt âÄî the highest debt load upon graduation among Big Ten schools. With additional Pell grants and loan forgiveness, this number has the potential to be significantly reduced, meaning lower total bills across the board. Additionally, with the prospect of fewer loans, potential graduate students may be able to finance their continued education. Too often students must drop out of a program because of the expense. Yet, it should be obvious that while we hold a crumbling economy in our hands, we canâÄôt afford to have our brightest students slip through the cracks. Kristi Kremers, president of the Graduate and Professional Student Assembly, believes the additional changes needed to reform the system entirely will not occur until students begin to develop a better understanding of their personal finances. Otherwise, she said, the political pressure needed to enact reform will not be there. âÄúI think this [proposal] is a great step, but I also think that we have to be more realistic,âÄù Kremers said. âÄúItâÄôs only one part of the solution.âÄù With tuition climbing quickly, the amount of debt students incur is unsound. Thus, Kremers wisely suggests the need for a new understanding of what it means to finance an education. âÄúMany students arenâÄôt financially aware and savvy to realize what a dampening effect this is going to have on their future life goals,âÄù Kremers said. âÄúThey just assume if I have X career, IâÄôll be able to have this quality of life, and thatâÄôs no longer the case.âÄù Reforming the student loan system is essential, but even if reforms fail, students need to take responsibility for their finances. Know how much debt you have and what kind of lifestyle you will have as a consequence. For many, having an education is the key to personal fulfillment and success. As Obama noted, âÄúNo one should go broke because they chose to go to college.âÄù It should be a valued life experience available for everyone. Without the approval of these proposals, the downward debt spiral will only continue, then more and more students will opt out of an education or end up filing for bankruptcy. For the sake of the economy and the lives of both current and future students, change is exactly what we need on student loans and financial aid. Jennifer Bissell welcomes comments at [email protected].