Student loan forgiveness program introduced by President Obama

Student loan forgiveness program affects federal student loans

WRITTEN BY: Janelle Vreeland
President Barack Obama
Image Source: Center for American Progress Action Fund via Wikimedia Commons
President Barack Obama

The president announced a student loan forgiveness program on Wednesday and it is being met with mixed reactions.

Bakersfield Now reports that the federal student loan forgiveness program would affect a measure that has already been passed by Congress. The current measure caps student loan payments at 15 percent of discretionary income and any remaining debt after 25 years is forgiven. The revised student loan forgiveness program, however, would cap payments at 10 percent of discretionary income and any remaining debt after 20 years would be forgiven.

"Our economy needs it right now," Obama said when introducing the proposal. "And your future could use a boost right now."

The plan would also allow borrowers with loans from the Federal Family Education Loan Program and a direct loan from the government to consolidate them. This proposed program would go into effect in 2012, two years sooner than the original plan.

While many students are excited about the proposal, some believe that others would abuse the program, refusing to pay off loans simply because they will, at some point, be forgiven.

You can read more about the student loan forgiveness program here. Check out our financial aid and student loans sections!

What do you think? Does Obama's student loan forgiveness program make sense to you? Tell us in the comments below!

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