President Obama set to lower student low payments
POSTED: Monday, June 9, 2014 - 5:31pm
UPDATED: Tuesday, June 10, 2014 - 8:56am
TYLER, TEXAS (KETK) — student loan debt is through the roof and that number keeps climbing. President Obama is tackling the student loan issue again. He wants to lower student loan payments, he wants to bring relief to the burden of student loan debt.
It's reported the department of education will renegotiate its contract with loan providers to give financial incentives to borrowers. A student we spoke to says he doesn't see a relief by lowering monthly payments because you have to pay the full amount either way and maybe even more.
"It's certainly a problem for many students when they graduate," said Jay Oliver, Financial Advisor of Rose Point Capital.
The national average of student loan debt is close to $30,000 and our state sits around $24,000. "Students graduate with modest paying jobs and their student loan is a burden that they carry with them sometimes 10,15 or 20 years before they can repay those loans," said Oliver.
President Obama is promising to cap student loan payments for those who are on track, meaning able to pay their loans on time. Here's the president's relief plan: Capping student loan payments at 10-percent of the students income and capping interest rates for active-duty military members at 6 percent.
"It just doesn't make sense, there's way over a period of time we are going to be in debt over the 15 years," said Bret Ralson, senior at UT Tyler.
After attending ETBU and furthering his education Ralson tells us 25-percent of his income goes toward his student loans. "My Stats book is $400 that's for one semester plus the tuition is outrageous." He says that the problem and the reason he has to borrow. "In my past with Obama everything is good up front on paper but in the future it doesn't work out."
"Limiting the repayment to 10-percent of the discretionary income might sound really helpful to many people," said Oliver.
Oliver says it will be easier to make but the debt will still be there. "It just means that the terms will be the number of years to repay the debt will be more and the ultimate outcome would be that they would pay more in the long run."