Blog

Browse All Blog Topics

Obama's Student Loan Plan: What's in it for you?

Jun 10, 2014

by Suada Kolovic

The financial aid process can be a daunting one but if you're planning on attending college any time soon, you should know that there are tons of federal student aid options available. From Pell Grants to Perkins Loans to FAFSA, the funding is out there but your eligibility to receive aid depends on your level of need and, subsequently, how much aid you are eligible to receive. Translation: For the majority of students, loans are inevitable. But don't fret just yet because President Obama announced an executive order capping loan payments: In an attempt to ease heavy college debt, millions of student loan borrowers will soon be able to cap their payments at 10 percent of their monthly income.

According to the administration, this action will help up to 5 million more borrowers but will not be implemented until December 2015 at the earliest. And while some students taking out loans can already cap their loan payments at 10 percent of their incomes, the president's order will extend this ability to students who took out loans before October 2007. (It’s important to note, however, that President Obama's executive order would cover only those loans from the federal government, not private financial institutions.) "The past couple of years, we've done future students, we've done current students, and now we're trying to take a step back," Education Secretary Arne Duncan told reporters Monday. Duncan went on to explain that the expansion of the payment caps would be "fantastic for the economy" by allowing young people to spend or invest that money elsewhere. (For more on this story, click here.)

What do you think of the president's attempt to ease the financial burden associated with student loans? Let us know your thoughts in the comments section. And for more information on federal funding, visit our Financial Aid section.

And don't forget, you should pay for your college education with as much free money as possible! Find as many scholarships and grants as you can before turning to student loans. Visit the Scholarships.com free college scholarship search today where you'll get matched with countless scholarships and grants for which you qualify, then apply and win! It’s that easy!

Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



If you can read this, don't touch the following fields


 

Alexis B  on  6/18/2014 12:57:15 PM commented:

This is maybe not the best option but it does offer some help. Students, once graduated, need to remember to increase payments as thier income gorws. That is the key to getting out of this debt sooner and with minmal interest penalties.To pay only the nimimum while your salary grows is really an unwise choice overall.

jennifer t  on  6/11/2014 1:31:30 PM commented:

This is somewhat cool I guess

Shari E  on  6/10/2014 9:47:11 PM commented:

This policy is not really helping students. Capped payments that likely won't cover accumulating interest, much less principle, are only kicking the can down the road. Sure, graduates will have a little more money in the short run but they are signing up for a lifetime of indebtedness because the years of accumulated interest will eventually come due. More needs to be done to teach kids that they can have an education without relying on loans. Working and saving might increase the time it takes to get a degree, but it will save the student many more years that will otherwise be spent repaying loans with interest.

Rae O  on  6/10/2014 7:33:24 PM commented:

This will help many college graduates like myself. The daunting task of repaying a loan for an education has not been made easier.

Mark W  on  6/10/2014 5:05:27 PM commented:

To me, this plan is unfair to those who have sacrificed and saved and ended up paying full freight. Why do those who have done it the right way, in essence, get penalized? So now, those who get relief can spend money elsewhere to aid the economy? What about those who saved for college and could not spend elsewhere. This is another government scam.

Sherry B  on  6/10/2014 4:43:52 PM commented:

I personally had the opportunity to speak with vice president Baden back in October of 2013, in which, the question was raised about future students having to pay back their student loans. Vice president Baden told us what the pros and coins would be in their attempt to ease the burden of students repaying the money that they had borrowed, so basically, this is not shocking news for me. Granted the fact that he mentioned the downside would be how long it would take to pay off the student loans would be the same as a thirty year mortgage, but it is sad to say that sometimes you have to take the good with the bad. "You must choose from the lesser of the two evils", quoted by Socrates. I believe the Obama administration as good intentions for college students and they have opened the door for future ideas on this dilemma. For those that think the federal government is the one that raises college tuition, YOU ARE WRONG, believe it or not, it is the state that raises your tuition. If you want to have a voice, write your governor with your concerns, make a petition to free the cost of tuition, if you don't step and take action, then don't complain about the cost. You have the power to make a change in our college future!

Most Shared Articles

Fighting crime is no easy task and is not meant for everyone. Careers in criminal justice aren't limited to police officers. You can study to be a criminal law paralegal, a crime lab analyst or even work for homeland security. If you plan to take this route, don't forget to apply for these solid scholarships to reduce debt while also doing your part to reduce crime: [...]

0 months ago 0 comments Read More

Due to Oregon's $1.8 billion budget crisis, public university leaders want funding reallocated from the Promise program to the state's need-based grant, which is awarded to low-income students who attend Oregon's public universities. [...]

0 months ago 0 comments Read More

The traditional college route isn't the best choice for everyone. There are ample scholarship opportunities for students who opt for a vocational career, whether it be in the plumbing, carpentry, electrical, firefighting or many others. If you want to learn or hone a specific skill as an alternative to attending a more traditional four-year college, take some time to consider these vocational scholarship opportunities: [...]

0 months ago 0 comments Read More

Wheaton College, a liberal arts college in Massachusetts, has created a refugee scholarship following the POTUS' immigration order in an effort to preserve their "foreign-born community." Another scholarship called The Privilege Grant, was recently created and is exclusively for white men "pursuing college on equal footing with their female, queer and ethnic minority classmates." [...]

0 months ago 14 comments Read More

February is Black History Month, or National African-American History Month, and is annually spent celebrating the achievements and contributions of black Americans in U.S. history. MLK had a dream - what is yours? Ours is helping you go to college with as little debt as possible. If that's your dream, check out these Black History Month-inspired scholarships: [...]

0 months ago 1 comments Read More

Living the college life has gotten way more expensive since 1980, and not including just tuition and fees. While many types tuition freezes, government tuition-free programs, scholarships, and grants help foot the tuition bill, housing and food remain uncovered, according to MarketWatch. [...]

1 months ago 2 comments Read More

The NFL Super Bowl is right around the corner, and while you may be enjoying the highly entertaining commercials or half-time show, we’ve compiled a list of football scholarships for those of you who one day aspire to play in the Super Bowl. If you have a passion for the game and wish to play at the collegiate level and beyond, check out these award opportunities and get paid to play: [...]

1 months ago 0 comments Read More

At elite colleges, more students come from the top 1 percent than the entire bottom 60 percent, according to a new study. While roughly one in four of the wealthiest students attend elite schools, including five Ivy League schools, graduating college helps "level the playing field for students of all socioeconomic backgrounds," according to Inside Higher Ed. [...]

1 months ago 0 comments Read More

Not all scholarships are awarded to the best writers with the strongest essays. So whether you're too busy writing other essays for school or simply not the best at literary composition, there are scholarship providers that dole out funds for unique hobbies or skill sets; or even for simply entering a contest. Check out these no-essay (or essay-alternative) awards for a chance to fund your college education:: [...]

1 months ago 3 comments Read More