During the Democratic National Convention, Bill Clinton exhorted everyone to tell voters about President Obama’s student loan reform. Then Samuel L. Jackson joined the fray, lauding it in his new ad for Obama that went viral in the last week. I was slightly confused both times because it felt like I was missing something.
THAT’S WHAT’S THE MATTERDuring the Democratic National Convention, Bill Clinton exhorted everyone to tell voters about President Obama’s student loan reform. Then Samuel L. Jackson joined the fray, lauding it in his new ad for Obama that went viral in the last week. I was slightly confused both times because it felt like I was missing something.
Where was this big solution that had supposedly happened? I finally did my research, and I have to say I’m pretty disappointed.
The main measure they’re promoting seems to be the income-based repayment plan Obama passed in 2010. Income-based repayment is a step in the right direction, without question. But it’s just not a very big one.
Under this plan, certain people would qualify to have their monthly payments on federal student loans capped at 10 percent of their income. To qualify, a debtor has to have a low income and a high interest rate.
The White House’s website says 1.6 million people will qualify for IBR this year. That’s way too small a number to brag about when we have 1.7 million people graduating every year.
It’s hard to find more statistics on the program because it has a stunningly bad problem with publicity, but what I can find isn’t impressive. There are currently 972,000 people in the program, which is only 2.6 percent of all borrowers, and it’s been around since 2009. Another 2 or 3 million more could apply.
But this is such a small number when you look at the scale of America’s student debt problem. Until this year, it wasn’t even required for lending banks to mention the program to students who were struggling to make repayments.
Capping repayments at 10 percent is a good idea, but the government is still making reactive—rather than proactive—laws about student debt. The total amount of student loan debt in the nation is more than $1 trillion, higher than the total amount of credit card debt. But Congress and the president still neglect to look at the problem in a way that would solve it or seriously alleviate it.
We need programs that will reduce payments but, more than that, we need programs that will prevent people from accumulating that debt in the first place. The average student shouldn’t graduate with over $20,000 in debt, but accepting federal student aid is more or less a given these days.
For a lot of people, myself included, federal student aid isn’t enough to cover everything. This is supposed to be a public education system, but students are still left to cover the cost of attendance.
The Student Aid and Fiscal Responsibility Act is the other student debt reform enacted under Obama’s administration. It extended the maximum number of available Pell grants and ended the federal backing of private loans. But that was back in 2010.
The administration hasn’t made meaningful progress on student debt in years, and in the meantime students lost their interest-free six-month grace period on repayment after graduation, and grad students lost their access to subsidized Stafford loans.
Obama’s administration has lost a lot of progress on student debt as well, and income-based repayment doesn’t come close to making up for it. It’s a growing problem, and it’s gone too long without being properly addressed.
Clinton made us some big promises, like, “No one will ever have to drop out of college again for fear they can’t repay their debt,” and: “This will change the future for young Americans.” Samuel L. Jackson said it was going to save me thousands of bucks.
These evaluations simply don’t meet the reality of the situation. We need a bigger solution than this, and we need it soon.
i agree that student debt is the nation’s problem. let’s unite. i applaud how you say we need pro-active solutions. i applaud you showing the pro-active efforts on the government side to groom, hook, and keep student as debt servants on the leash paying forever. mmm20121015.