OBAMA STUDENT LOAN FORGIVENESS

Recent reports place national student loan debt somewhere between $550 billion to upwards of $1 trillion; this is quite an alarming figure considering that the national credit card debt is only $690 billion.  The large majority of students can’t pay for college out of pocket and government programs provide limited assistance; thus the remaining option for most students is taking out private loans.  Rising medical costs and health mandates have forced politicians to reduce education funding and channel this revenue to cover the national healthcare crisis.  This change in policy has led to both public and private educational institutions raising their tuition costs and other fees to cover the gap created by loss of government funding. The newest weapon to try and combat the student loan problem is President Obama’s Student Loan Forgiveness 2011 Plan.

What can be done to curb the ever increasing education costs?  The president has initiated a strategy, the Obama Student Loan 2011 Plan, that he believes will help students aptly manage and promptly repay student loans.

What Does the Obama Student Loan Forgiveness 2011 Plan Entail?

The White House has announced plans to implement policy changes in regards to student loan procedures much sooner than the projected date of 2014.  Congress originally approved multiple measures to ease the education financial crisis, the best of which is the “Pay As You Earn” Plan that provides numerous benefits to consumers.  The grand advantages of this proposal include:

• Lower monthly payments via a reduction from 15% to 10% of a borrower’s discretionary income
• Balance forgiveness after 20 years instead of the current standard of 25 years
• Dissimilar loan consolidation with the FFEL and direct government loans eligible to be merged under a lower interest rate

Comments by Supporters

Like most government policies, the Obama Student Loan 2011 Plan has suffered much debate resulting in both acclaims and criticisms.  Promoters of the strategy tend to focus on the money saving functions since this plan will not put a further strain on the already overburdened taxpayers.  The White House purports that money will be saved once the loans are consolidated since the government will no longer be responsible for a subsidy paid to private lenders on the FFEL Program loans.  Economists point to the accelerated project as a positive step toward assisting borrowers in the often confusing and complicated financial world surrounding student loans and their subsequent repayment plans.

Comments of Opponents

Although most political and financial parties are in agreement that the national student loan debt is alarming and needs addressing, some feel that this is a symptom of a larger problem.  Reduced government funding for education expenses is a direct result of the healthcare crisis currently gripping the nation.  Opponents of the Obama Student Loan 2011 Plan claim that the nation would benefit more from addressing healthcare reform and reducing the related costs; this would free the revenue that was originally earmarked for education costs and return these monies to its original recipient.  Other persons suggest that students are not the economic group in most need of financial assistance and that these efforts would be best directed toward lower socioeconomic groups.

Whether for or against the Obama Student Loan 2011 Forgiveness Plan, changes are fast approaching that will hopefully ease financial burdens on borrowers.  Let us hope that this is just the first step in a grand strategy that will lead our financially strained government onto steadier economic grounds.

Related posts:

1. Student Loan Forgiveness Programs Available To Teachers and Healthcare Professionals In Low Income Regions
2. Student Loan Forgiveness Programs Available To Teachers and Healthcare Professionals In Low Income Regions