President Obama Announces Plan to Ease Financial Stress for Students

Many college graduates struggle with getting a job after they receive their diploma. Not having a job also hinders the ability to pay off student loans. MSNBC reports that college loan debt has become a bigger issue for families than credit card debt. President Barack Obama plans to help reduce the economic burden by making loans easier to pay off.

What it means for students

Obama's plan is known as "Know Before You Owe." Students pay back their loans based on the amount of money they make. The repayment program will be tailored to for individual with a fixed interest rate for all. The amount of money people owe correlates directly to their income. This bill cuts down student loan interest rates. The money owed in federal loans would be alleviated after 20 years instead of 25 years, which it currently is now.  

The Washington Post reports that Obama says he won't wait for a response from Congress regarding the escalating costs of higher education. 

CNN reports College Board says the cost of enrolling in a public university as an in-state student climbed 5.4 percent this past fall.  

Obama's urgency to put plan in place 

MSNBC reports that Obama wants the plan to go in effect in January of 2012 rather then January of 2014, because job opportunities are slim. With a lousy job outlook, students won't have a steady income, or an income at all, making it difficult for them to pay off loans. The cost of attending college is rising yet the employment rate for college graduates continues to diminish. Obama's urgency to put the program in place is in response to his upcoming re-election campaign. The Washington Post reports Obama wants the support of potential voters. The plan targets a specific group of voters that were crucial to Obama's success in the 2008 election.  

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