According to President Barack Obama, getting a college education has never been of utmost importance for the residents in America. He also stated that getting college education was never that expensive as well.
While in his speech at the University of Colorado in Denver, President Barrack Obama publicized certain latest executive actions suitable to reduce the student loan payments. This initiative was towards lowering the utmost student loan payments by around 10% on annual income through a repayment plan based on the income. This plan is supposed to be activated since 2014 but Obama is willing to implement it next year.
A student loan consolidation plan with lower rates of interest for the borrowers was also announced by Obama. President believes that by lowering the loan payments, borrowers will find it easy to purchase homes and other stuff. This will definitely boost up the overall nations economy. Arne Duncan the Education Secretary stated to the reporters in a conference that such kind of alterations will definitely let borrowers save hundreds of dollars every month.
Duncan stated that “graduates can save a lot and think about their bright careers and this will help them meet their needs”
As per The White House there will be no extra charges to be paid by the tax payers after such changes.
As far as household debts are concerned, student loans are the no. 2 source. On the same day, a report was filed regarding president’s announcements on tuition costs. As per the report the in-state average tuition costs at 4-year public schools or colleges were raised $631, 8.3% as compared to last years calculations. A record breaking situation occurred with cost of credit loan as it passed $8000.
A graduate student of public health at University of Colorado, Anna Van Pelt, 24 age, had attended the president’s speech and stated is at a “real big deal”. She estimated that she could graduate around $40,000 in loans but is still worried about repayments of the loans. She said. “My rate of interest on the loans will be on a high until I graduate, especially as I am out of job. It’s not just about repayment of the loans but also about repaying them without a job”.
Last year a loan was passed by Congress with which the repayments were lowered as loans were moved towards direct lending without any middlemen banks. This was passed with an intention or anticipation of saving around $60 billion in ten years.
On Tuesday, Rep. Virginia Foxx, R-N.C, a hearing was made on the slip over higher education that borrowers received poor quality customer service. As per a news release by Senate Republications, many workers in the student lending, along with Sallie Mae Inc were laid off just due to this change.
As per current records, around 23 million borrowers have borrowed $490 billion loans under Federal Family Education Loan Program. Around 11.5 million borrowers received $102.2 billion loans directly from Education Department last year.
It was stated in the report that “inspite of increase in college prices in last 4 years, average students failed to observe equal rise in college net price, defined as published price-grants with scholarships, tax benefits.”
As per the reports given to Foxx’s congressional panel by chief operating officer of Education Department federal student aid, James Runcie, of over 5000 college student’s personal financial details were viewable on direct loan site of the department.
Runcie stated that affected students were given credit monitoring and the site got shut down until the mater got resolved.