Count me as one of those people with a significant student loan debt. You know I have been tempted to sign petitions that'll just wipe out student loan debt.
Is that practical? That's very doubtful because lenders want their money back! A weird catch 22 they want their money back, but students who either drop out or graduate without finding a job to pay this debt back will remain in debt and could default. It makes me wish I had done better planning financing my education.
With the nation's student loan debt approaching $1 trillion, the issue has also generated debate in Washington. The Obama administration announced plans Tuesday to expand a government program to help 1.2 million borrowers reduce their payments and consolidate their student debt.Via Newsalert!
Republicans, including some presidential hopefuls, have demanded in recent days that government student aid programs be reduced or eliminated.
About two-thirds of the students who were in four-year colleges in 2009 used loans to pay tuition, accruing an average debt of $24,000, said Lauren Asher, president of the nonprofit Institute for College Access & Success. One in 10 owed $40,000 or more.
And even at a time when new tools have been developed to help poor students negotiate federal payments, an increasing percentage of them are defaulting. Last year, 320,000 people who recently left college defaulted on a federal payment.
"Compared to a generation ago, a lot more people have student loans and are carrying debt that is much greater," said Asher, adding that besieged state governments are passing on costs to students at public schools by driving up tuition.
"Most people look at the sticker prices at Harvard and Yale," Asher said. "But most students go to public schools, and tuitions there are also rising rapidly."
Republicans in Congress are seeking to lower the $5,000 cap on federal Pell Grants, which aid low- and middle-income students and do not require repayment.
"Look, I worked three jobs to pay off my student loans after college," House Budget Committee Chairman Paul D. Ryan said last week at a town hall meeting in his native Wisconsin. "I didn't get grants, I got loans, and we need to have a system of viable student loans to be able to do this."
Presidential candidate Ron Paul also reminded voters last weekend that he had worked his way through college and medical school, and promised that if he was in the White House he would eliminate federal student loans altogether.
But President Obama has supported loan programs and tried to improve them. He also has reminded voters of his personal experience: Both he and his wife, Michelle, came out of college and law school with $60,000 in student loan debt. "We were paying a bigger amount every month than our mortgage," he said last summer. "And we did that for eight, 10 years. So I know how burdensome this can be."