President Barack Obama announces new reform to lower student loan debt

President Barack Obama proposed a new plan that he hopes will lower the amount of federal student loan debt. Obama spoke to a crowd of hundreds at Lackawanna College in Scranton, Pennsylvania on August 23.

 

“Higher education is not a luxury; it’s an economic necessity,” Obama said to an exuberant audience in the college’s gymnasium. “Getting a higher education is one of the best things you can do for yourself, and for your country,” he added.

 

While the average cost of college tuition at a four-year university has risen by more than 250 percent in the past three decades, the essential family income has only risen by 16 percent. Though states have been moderately effective in regards to cutting back on their higher education budgets, President Obama stressed that such efforts are not enough.

 

“The data is clear. If you get some kind of higher education, whether it’s a two-year degree, a four-year degree, a technical college, you’re more likely to have a job. You’re more likely to see your income going up more than ever before. Some form of higher education is the surest path in the middle class,” he reassured the crowd.

 

In an attempt to put a cap on loan repayments, in mid-December of 2011 the Obama Administration launched the ‘Pay As You Earn’ plan, a student loan repayment plan that enables students to pay off their federal student loans as they earn income. However, not many students are eligible for the program and many are unaware that the program even exists.

 

“I’ve never heard of it,” said ARC geography major Imani Davis. “I’m happy that I can say there’s one thing I can support him on. It’s a good thing that he’s looking out for students; I’m definitely glad to hear it.” She added.

 

As President Obama went into further detail about new strategies that he plans to put into action, he let the crowd in on a few reforms that he is currently in the process of executing, with his three principal goals being to increase value, encourage innovation and help students manage debt after graduation. Another element of his plan is to direct his administration to develop a more useful rating system for colleges.

 

“Education is something that will pay off in time, but it’s gotta be managed,” he declared, looking out into the audience. “I don’t want debt to keep you from getting the job you want or getting married, or buying your first home.”

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