Obama Lends Hand to Students in Debt
Eric Essagof '12, Staff Writer
May 25, 2012 • 44 views
Filed under News
The younger generation voted dramatically in favor of President Barack Obama in the 2008 election, and now he appears to be paying them back.
From the Oval Office and the campaign trail, Obama has been announcing plans to forgive student loan debt, and has argued for interest rates, the amount a student has to pay back per month on loans, to stay low.
According to the New York Times, the average college student pays back $23,300 in student loan debt, and this debt is widespread. There are $1 trillion in outstanding loans in this country.
Obama has already lowered the percentage of income that students are required to pay on their loans from 15 percent to 10 percent, and has announced that any remaining debt will be forgiven entirely in 20 years. This means that students will be paying less over a shorter period of time.
These announcements are motivated not just in politics, but also based on troubling statistics that have come out about student debt in recent years. According to the New York Daily News, student loan debt in America has reached $1 trillion. To make matters worse, unless Congress acts as the president has advised them to, the interest rates on current loans could rise from 3.4 percent to 6.8 percent this summer, meaning that graduates may start paying a lot more.
According to AP Government and Politics teacher Suzanne Klein, a teacher at Staples High School and a former political reporter for Congressional Quarterly, this move shows that Obama is keeping an eye on the upcoming November election.
“The fact that [young voters] turned up in 2008 larger than usual for Obama was important for his victory,” Kammerman said.
Young people certainly preferred Obama in the past election. According to MSNBC, among those between the ages of 18-29, 68 percent of them chose Obama over Senator John McCain.
But, according to Kammerman, Obama is going to have to work to get them to come out in such strong numbers again.
“Over the past few years some people have been disappointed,” Kammerman said.
While both political parties want to keep the rates low, they both disagree on how to pay for the plan, setting Washington up for yet another messy legislative fight. Democrats want to raise taxes on the wealthy, while Republicans want to take money out of Obama’s health care reform law.
Senate Republicans recently blocked a vote on the Democratic plan to keep interest rates low. Democrats argued that Republicans wanted to protect the taxes of the wealthy at the expense of the students, while Florida Senator Marco Rubio (R) argued that the plan unfairly raised taxes on “the kinds of small businesses that give jobs to graduates who not only need low interest rates but need jobs in order to pay their student loans.”
According to Lenny Klein, teacher and creator of the Personal Finance course at Staples High School, the recent fear of student loans should not be a disincentive from getting a college education.
“There are many ways to get money for college and [the cost of loans] should never be a deterrent,” Klein said.
Instead, Klein recommends that students looking at colleges start doing research into alternatives, including scholarships and grants, which are two forms of payment that do not require the recipient to pay anything back.
The college and career center and the guidance office are two sources in the school that offer such funding options.
But, without either of those options, student loans may have to play a role in deciding which college a student should choose.
“If all else fails and you have to go the student loan route, I wouldn’t necessarily let having to pay for your own education deter you from going to college, but that should be a factor in which college you choose,” Klein said.
For those who cannot afford college without student loans, Klein recommends looking at state schools, which offer cheaper in-state tuition. Klein himself is a graduate of University of Connecticut.
Klein also believes that students should not be afraid of student loans, and that they are a manageable form of debt.
“Student loan organizations will work with you and structure the loans in such a way that it works within the constraints of whatever your individual budget is,” Klein said.