President Barack Obama appeared at the University of Colorado Denver on Wednesday to give students further details on his “Pay As You Earn” program to lessen the financial burden of about 1.6 million Americans faced with student loan debt.
Starting in 2012, the proposal will cap borrowers’ monthly loan payments at 10 percent of their expendable income, or what’s left after paying all the bills. The plan will also forgive borrowers’ remaining loan debt after 20 years of payments.
“Because of this change, about 1.6 million Americans could see their payments go down by hundreds of dollars a month,” Obama said.
Obama cited his family’s personal experience with student loans when speaking about the need for reform.
“We were paying more for our student loans than we paid on our mortgage each month,” Obama said.
The proposal also allows borrowers to consolidate their loans and receive a reduction in their interest rates ranging up to half a percent. Secretary of Education Arne Duncan said in a teleconference the consolidation will help some borrowers stay out of financial trouble.
“When people have loans to pay from multiple lenders it makes them more likely to default,” Duncan said.
The announcement coincides with a report released by the Obama administration Tuesday that shows in-state tuition for public, four-year institutions has risen more than 8 percent from last year.
“Ensuring that every student has access to a higher education is a priority of this administration,” Duncan said.
Duncan said the key to crafting America into a more educated work force is to take advantage of the programs the government provides.  The previous income-based repayment program was not fully utilized by the public, according to Duncan. Almost 36 million Americans have federal student loan debt, but only 450,000 took advantage of the program in place.
Emily Hester, coordinator for the University’s Student Financial Management Center, said students should research before taking out loans.
“The key is to take out what you need and not more,” Hester said.
Sarah Elisar, history senior, said she felt University students had the upper hand regarding student loans when compared to the rest of the nation.
“TOPS is a huge benefit to Louisianans, and I don’t think student loans are as big of a deal here because of it,” Elisar said. 
The loan repayment proposal is one in a string of announcements made by the Obama administration this week to support its “We Can’t Wait” campaign. The campaign’s message laments a lack of action from Congress and stresses the need for some reform to be taken care of sooner rather than later, especially in light of the continued economic crisis.
 
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Contact Josh Naquin at [email protected]