The student newspaper of Bucks County Community College

The Centurion

The student newspaper of Bucks County Community College

The Centurion

The student newspaper of Bucks County Community College

The Centurion

Loading Recent Classifieds...

Obama to aid students with loans

President Barack Obama

President Barack Obama announced on Wednesday a plan which will push forward the start date for students to pay off their loans.
The plan by Obama is called the “Pay as you earn program” and is said to benefit over 1.6 million borrowers and reduce their payments by hundreds of dollars per month.
Obama also said that all of the remaining debt on the loans would be forgiven after 20 years, which under the current law is only five years.
In a statement addressed to college students, Obama said “These changes will make a difference for millions of Americans. We should be doing everything we can to put a college education in reach of every American.”
The price of attending a public university increased 5.4 percent for in-state students to $21, 447 this fall.
One proposal of the plan would be to advance the start date for the loan payment program which is based off the struggling income that most college students have.
The Obama administration has said that about 6 million Americans can take advantage of the loan consolidations.
Stephen Wermuth, 19, a sports management major from Bensalem, knew nothing about the plan, but was thrilled to hear it.
“I think it’s a really good idea, saving money is always good,” Wermuth said. “This plan will certainly benefit us, and will bring more people back.”
According to the Department of Education, at for-profit colleges and universities, 15 percent of student loan borrowers defaulted in the first two years of repayment, up from 11.6 percent the previous year. At public institutions, the rate was 7.2 percent, up from 6 percent, and at non-for-profit private institutions, it was 4.6 percent, which was up from 4 percent.
According to CNN, congress has passed a law that will go in effect in 2014 that would drop the monthly payment for loans by 10 percent, and would forgive the debts owed after 20 years.  As a result of this, the administration would improve on the law by speeding up the terms in order for it to have an effect on the loans in 2012.
In regards to this “Pay as you earn program,” it is said that 450,000 students are enrolled in the payment plan, and hundreds of thousands more are eligible to join.
The other proposal of the plan encourages graduate students with a choice of two or more kinds of federal loans, giving them a small interest rate break of 0.5 percent.
According to the Institute for College Access and Success, in 2008 the average debt for graduated students who took out student loans was $20,200 at public universities, $27,650 at private non-for profit and $33,050 at private for-profits.
The president’s focus on the college loan assistance could in turn help him with the votes of young adults.