President Obama included a new repayment program for student loans in his 2016 budget proposal for Congress that will expand the income-based repayment plan put into place last summer.
“Let’s tell another one million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years- and forgiven after 10 years if they choose a career in public service, because in the United Stated of America, no one should go broke because they chose to go to college,” said President Obama in his 2010 State of the Union address.
There are 40 million Americans with student loans which adds up to $1.2 trillion in outstanding debt.
Income-based repayment borrowers make payments based on their incomes and can qualify for loan forgiveness. The Education Department plans to make all borrowers eligible for a plan involving “pay as you earn.”
For more information, visit http://www.whitehouse.gov/issues/education/higher-education/ensuring-that-student-loans-are-affordable.
President Obama announced his proposal for community college to be free for two years for responsible students. “Higher education should not be a Democratic or Republican issue. It’s an American issue,” Obama said. If the plan becomes fully implemented in the future, full-time community college students would save an average of $3,800 per year. Students would be eligible for free tuition if they attend the community college at least half-time, maintain a 2.5 GPA, and make progress toward their degree, according to White House officials. Obama’s proposal could benefit up about 9 million students across the nation, each year. The federal government would cover three-quarters of the average cost of community college and participating states would be expected to contribute the rest. “Students who started at community college during those two years and then go on to a four year institution, they essentially get half of their bachelors degree free,” Obama said, “It can be a game changer.” The White House stated that this plan would cost $60 billion over a span of 10 years. President Obama pitched his plan during his speech at Pellissippi State Community College in Knoxville, Tenn.
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