President Obama Announces Relief Plan for Student Loans
POSTED: Wednesday, October 26, 2011 - 12:23pm
UPDATED: Thursday, October 27, 2011 - 10:51am
Student loan debt is about to hit an historic peak in this country. This year, for the first time, college grads will owe more than one trillion dollars, more than we owe on credit cards.
In Colorado, President Obama is announcing more relief for students repaying those loans. Tuition has shot up 600% in the last 30 years, causing more students to borrow more money.
The average student graduates college with $24,000 in student loans. A quarter million recent grads are unemployed. Even those who are working, are worried about paying if off: "I'm pretty sure it will be coming out of my estate the day that I die," said one college graduate.
As part of health reform, the federal government eliminated banks as middlemen. Today, President Obama will announce new "pay as you earn" rules.
The President calls for allowing borrowers to consolidate new loans and old into one loan with a .5% drop in interest rate, which for many, may prevent default.
Ann McKeehan graduated five years ago with what she calls a "mountain of debt,” but questions if cheaper loans are a smart move. "Our government is sort of constrained enough with resources that I question, I would question the prudence of doing something like that right now."
Despite the cost, college is still a good deal. The unemployment rate for college grads is less than half the national average. President Obama makes that announcement today at the University of Colorado, before returning to Washington.