Should College Grads Get a Break on Their Loans?
by Bill Hayes
The New York Times’ Room for Debate lets various knowledgeable contributors discuss news events and other timely issues. One recent debate covered: Should College Grads Get a Break on Their Loans?
The Obama administration unveiled a plan this week aimed at reducing the burden of student loan debt, which now surpasses credit card debt in the United States.
The plan will let borrowers consolidate their government loans and government-backed private loans into one monthly payment, at a lower interest rate. It will also give people the right to cap their loan payments at 10 percent of their income, down from a current limit of 15 percent, and will allow student debt to be forgiven after 20 years, compared with 25 years under the law now.
Will the Obama plan make a difference? Will it help prevent defaults or will it lead today’s students to borrow more, if they view their debts as potentially negotiable and if they believe the government is assuming more of the risk? What should government do about student debt and the college loan industry? [more]