President Obama announces plan for student loans
Americans buried under student loans could get a break next year if President Obama has his way. Wednesday, he announced two ideas to help them out of debt. Our Erin Vannella reports.
To view our videos, you need to
install Adobe Flash 9 or above. Install now.
Then come back here and refresh the page.
UNITED STATES -- "It's nice that the government is able to give us the loans but someday we're going to have to pay those back and if we can't afford it that's the big issue," said Russell Sage graduate student Nicole Wolff.
Wednesday, the President announced a two part plan to help, amending and accelerating the existing financial aid plan for 2014.
"The former proposal would roll out with a 25 year time frame and a 15 percent income cap," said Russell Sage Vice President Dan Lundquist. "This lowers the cap to 10 percent which saves students money, and if they opt into it, any remaining unpaid debt after 20 years is forgiven."
It's a plan that students and school faculty members say comes none too soon. College tuition continues to rise at most institutions and the percentage of graduates who find jobs isn't improving.
"Right now, student loan debt cannot escape them through bankruptcy," said Lundquist. "It chases you to the grave and so this would be a good thing in that regard too."
A second part of President Obama's proposal encourages graduates with two or more kinds of federal loans to consolidate them, giving them a small interest rate break of point 5 percent. It's more fine print college faculty say has potential to help but needs more explaining. Students say bring it on.
"They shouldn't get in over their heads," said Lundquist. "They should make sure that they're looking forward and planning, and then the students that do that, can get a good education and be as on top of their finances as they can be."
"I think any little increase that will help kids get into college is beneficial," said Russell Sage graduate student Kelly Busch.
"Every little bit does help when you're pinching pennies," said Wolff.