Oct. 27, 2011
BOSTON — Cash strapped college graduates might have some extra money in the bank thanks to an announcement made by President Obama this week.
President Obama held a student loan relief event in Colorado on Wednesday highlighting two measures to help college graduates manage student loan debt.
President Obama said, "And when a big chunk of every paycheck goes towards student loans instead of being spent on other things, that's not just tough for middle-class families, it's painful for the economy."
For starters the President will accelerate a plan to cap student loan payments at 10 percent of their income starting next year, two years ahead of schedule.
"We are going to put them into effect not in two years, but next year because our economy needs it right now," President Obama said.
The second initiative is designed to encourage graduates with two or more kinds of federal loans to consolidate them.
"We are going to make it easier with one interest rate a month, with a better interest rate," Obama said.
American Student Assistance is a nonprofit organization that guides students through the murky waters of college debt. Mike Ryan of ASA says this is not an overhaul of student loans, but a tweak to the system.
"It is a modification to the current program, but we see this is as good because it gives us a chance to let people know about it. The program has been available for quite some time but borrowers are not aware of that," Ryan said.
The plan will help some 1.6 million college students to lower their monthly payments by a few hundred dollars.
Milan Goswami, a Boston University student said, "I will have money in my pocket and can get an apartment and make my life after graduation a little easier for me."
Other college students prefer to focus on the course load and not what the post-graduate balance sheet will look like.
Courtney Carroll, another BU student said, "I am sure I will be worried about it, but I am not dying of fright about it."
Student loan debt has been a major protest platform in the Occupy Wall Street movement. However, most of the college graduates demonstrating won't benefit from Obama's plan, because it only helps borrowers taking out loans next year.
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