Everyone of you who are critisizing the President's college loan repayment plan have it WRONG! It's not more federal spending; it's not even a discount. It's a reduction in the out-of-pocket payments college student pay directly toward their federally guaranteed student loan.
The loans ARE NOT forgiven. Those who borrowed the money will still have to pay it back only instead of making payments at the higher repayment amount including interest, the President has instead taken a program that's already written into law* (I'll have to do more research to find the exact piece of legislation that covers this) that allows students to instead pay up to 10% of their "discretionary income" to pay off their loan. In other words, repayment is based moreso on how much money the student makes vice a set repayment amount like, for example, a home mortgage.
Example:
$10,000 loan
$500/wk income
10% of 500 = $50
So, if your repayment was $250/month you save $50 per month on your loan repayment. However, if on the other hand your repayment was $150/month, you might have to pay an additional $50 per month. Of course, there's also loan deferments.
Bottom Line: Some student will benefit from the repayment measure (and I have to assume there will be many who qualify since most live on Ramen noodle diets and work part-time jobs to help pay for college and). Others may not, but it's a step in the right direction and it won't cost the government one dime of taxpayer money.
To learn more about the President's college student loan repayment plan, go to:
We Can't Wait to Help America's Graduates; or,
Press Release: "
Remarks by the President on College Affordability" (President's speech in Denver, CO on October 26, 2011)
You can also learn more about the President's proposal and use the repayment calculator on the
Federal Student Aide website to see if your revised repayment amount under the plan would provide you with savings.