By CHELO GRUBB
President Barack Obama has announced plans to decrease the maximum required payment on student loans from 15 percent to 10 percent of a household’s total annual income.
Any remaining debt will be forgiven after 20 years, down from the 25 years it takes now.
Alex Baucco, a Pima Community College English major, welcomes the changes.
“Going into college, I was constantly reminded about some of my family members who are still paying off loans with extremely high interest, 20 years after graduating,” Baucco said.
With Obama’s action on Oct. 26, the “Pay As You Earn” measure takes effect in 2012, two years sooner than originally scheduled by Congress.
The plan also allows consolidation of loans obtained directly from the government and from the Federal Family Education Loan Program.
Students are taking out more loans for college than ever before to pay for ever-increasing tuition and to compensate for less money being available from home, according to the College Board.
However, despite recent tuition increases, PCC has managed to keep prices below that of almost 85 percent of other two-year colleges in the United States.
Nationally, the average community college cost, including tuition and fees, increased 8.7 percent to $2,963, for the 2011-12 school year, according to a College Board report. Pima’s tuition costs $1,910 per year for full-time, in-state students.
Other college payment options are becoming harder to come by, as well.
A subcommittee from the U.S. House of Representatives recently proposed removing Pell Grant eligibility for students who attend college less than half time and for college students who lack a high school diploma or GED.
The White House touts its plan as a way to help students cap loan payments and consolidate debt.
“College graduates are entering one of the toughest job markets in recent memory, and we have a way to help them save money,” U.S. Secretary of Education Arne Duncan said in a press release.
Aside from worrying about the job market after graduation, students worry about being able to afford the debt they take on in order to attend college.
“Loans have been a major concern for me because without them, I can’t go to school,” Baucco said. “I’m glad that I don’t have to be as worried about being up to my neck in debt straight out of college.”