Former President Barack Obama has provided an alternative option among college students by proposing a loan forgiveness plan that was enacted in 2015.
College students are earning a higher education at a very high price. As children, we are told that in order to be successful, we must go to college. But when the time comes, we are charged thousands of dollars in tuition cost.
Going into debt has to be one of the scariest things a college student can experience due to being chained until you pay off the loans and interest.
According to an article written by ABC news journalist David Muir, the Forgiveness plan consist of paying back 10 percent of your monthly income.
“The executive action today means some students with outstanding loans initiated before October 2007, and who meet income requirements, could be allowed to cap their payments at 10 percent of their income.”
This means the less you earn, the less you have to pay, which seems reasonably fair. However, you’re going to start paying more when you start earning more. “The existing federal repayment cap program applies only to borrowers who took out loans after October 2007 and continued borrowing through October 2011 for some students, any outstanding balance is completely forgiven after 20 years.”
As a first-generation college student, I find this alternative option fair because college/universities can be extremely expensive. Especially for students who do not benefit from financial assistance either from Financial Aid programs or from their parents’ support. I personally believe this forgiveness plan is valid in the sense that it offers an option in reducing the amount of money you have to pay back.
Many college graduates are the first in their family to graduate, and they go through many sacrifices to receive a diploma. Yet, later have to pay the consequences of paying off loans and getting out of debt.
Additionally, the forgiveness plan creates an opportunity for college graduates to get a job/internship of their preferred field, instead of working at a generic job because they are required to make ends meet and pay off what they borrowed.
Although the forgiveness plan seems like an excellent idea, former Speaker of the House, John Boehner stated in 2014,
“Today’s much-hyped loophole closure does nothing to reduce the cost of pursuing a higher education, or improve access to federal student loans – nor will it help millions of recent graduates struggling to find jobs in the Obama economy.”
I have to disagree with Boehner because many college graduates will have the opportunity to go back to school and get a master’s degree or even a doctorate when they see they are not bankrupt from paying off loans. Paying only 10 percent will mean one will be capable of paying for additional cost like rent, food and basic necessities without going day by day.
As a result, this measure will help a high majority of college graduates in debt due to college loans. Secretary of Education, Betsy DeVos has not issued any type of solution regarding student loans. Trump and DeVos plan to eliminate the forgiveness plan, which will have a negative effect on many college graduate borrowers.