Recently President of United States, Barack Obama put up some considerably important points regarding the overhauling of student loans. Here are a few of those important points, that you (if your a college going student) should be aware of.
1. Cap loan payments at 10% of adjusted income
2. Forgive and eliminate the balances of 20 years of repayment
3. Provide funds upto $2.6billion for the minority institutions
4. Assign $500 million annualy for community colleges
5. Provide $750 million for state education grants
Obama’s plan would end a program in which the government pays private, for-profit student lending companies to make risk-free loans using taxpayer money. Instead, the proposed overhaul would broaden the government’s existing direct-lending program, saving billions of dollars that the president had proposed using to expand Pell grant scholarships for low-income students.
Colleges are too expensive in the first place
As years pass by, it has been seen that price for education is on a rise. This increase in the cost of education had made life much more difficult for students due to which they look for various methods of financing and end up in large sums of debt by the time they graduate. There is no system of maintaining check and balance to see how the prices have risen over the last few years for college education. A recent study shows that in the past five years, the average cost of in-state tuition and fees at public colleges has jumped 35%, after adjustment for inflation. In the past 25 years, the average cost of tuition and fees has risen faster than personal income, consumer prices and even health insurance.
For academic year 2008-09, the average cost of tuition, room and board at a public university was $12,796; for a private school, the total averaged $30,367. This amount is enough to get thousands of students depressed over their academic future. During such situations, where it is imperative to get a college degree, students have to go through the process of debts and loans, so that their college expenses could be met effectively.