Obama proposes new measures to ease student loan pressure

Obama proposes new measures to ease student loan pressure (Alberta Times) The White House said on Tuesday that President Obama is taking measures to ease the burden of student loans, which may help...

(Alberta Times)

> The White House said on Tuesday that President Obama is taking measures to ease the burden of student loans, which may help millions of college students who are short of money. According to Reuters, Obama plans to accelerate a measure to limit student loan repayments to 10% of income and advance the implementation date of this provision from 2014 to 2012. The student loan program is Obama's third such relief measure, following moves to help homeowners and encourage hiring of veterans. The White House hopes to highlight Obama's image of active action and confront Congress's "inaction." Obama's student loan relief measure does not require congressional approval and the White House estimates it will benefit 1.6 million students. Obama's new measure also stipulates that student loans will be forgiven after 20 years, compared with 25 years under the current policy. More than 36 million Americans have federal student loan debt, but only 450,000 can take advantage of income-based debt repayment plans that already exist. The new measures also allow 6 million students to bundle certain federal loan programs and make just one monthly loan payment, reducing the risk of defaults due to multiple debt obligations. The new measures will be implemented in January next year. Students who join the new repayment plan can also get a 0.5 percentage point reduction in interest rates on certain loan projects. Students can pay less each month and save hundreds of dollars in interest. Federal Education Minister Duncan said: College graduates face the toughest job market in years, and we are helping them by consolidating their debt and limiting their loan repayments.