When Graduate School of Arts and Sciences student Sabrina Klein heard about President Barack Obama’s proposal to reduce student debt, she said it would help her offset the cost of college education.
“I like the idea. I’m a grad student now, so when I’m all said and done, I should have close to a quarter of a million dollars in student loans,” Klein said.
The Obama Administration announced an executive order on Sunday, Oct. 25 that will require that student loans be paid back at a rate of 15 percent of their discretionary income and will begin loan-debt forgiveness after 20 years, according to a White House press release.
“In a global economy, putting a college education within reach for every American has never been more important,” Obama said in the release. “But it’s also never been more expensive.
“That’s why today we’re taking steps to help nearly 1.6 million Americans lower their monthly student loan payments. Steps like these won’t take the place of the bold action we need from Congress to boost our economy and create jobs, but they will make a difference. And until Congress does act, I will continue to do everything in my power to act on behalf of the American people.”
The proposal, called “Pay As You Earn,” will cap the monthly payback rate at 10 percent of a student’s discretionary income, according to the release. If enacted, Obama’s plan is expected to affect nearly 1.6 million current college students, with all future graduates feeling the plan’s effects by 2014.
The proposal will also enable future college graduates to consolidate their student loans into one monthly payment, ending the series of separate payments required by federal direct loans and Federal Family Education Loans. This option, which begins in January, could provide borrowers with up to a 5 percent reduction in their interest rates.
Some Boston University students said the proposal would offer relief to students.
“It is a thing that a lot of kids worry about,” said Julia Daly, a freshman in Sargent College of Health and Rehabilitation Sciences. “Some maintain a job while going to school full time to help pay back their loans. So, I think it’s a really good thing if Obama is trying to alleviate some of that stress.”
However, College of Arts and Sciences senior Mary Chase, said that while she likes the Obama Administration’s initiative, she thinks that it could go further.
“I think it’s great that the conversation has been started. He said that he wanted 60 percent of all Americans to be college graduates by 2025 or something like that, so I think it’s great that he’s trying to offset the costs for students that can have up to a hundred grand in debt,” Chase said. “But I just don’t think that the measures are big enough to offset all that cost.”
This is an account occasionally used by the Daily Free Press editors to post archived posts from previous iterations of the site or otherwise for special circumstance publications. See authorship info on the byline at the top of the page.
