Obama to Offer Assistance for Student Loan Debt

Wednesday, October 26, 2011

President Obama is set to announce a new program on Wednesday that the White House says will help lower interest rates on student-loans. He will unveil the proposal during an appearance in Colorado. The plan will allow students who hold both government and private loans to consolidate both into one low-interest government loan. The announcement comes as the president continues to highlight ways his administration can boost the economy through executive actions that don't require approval from Congress. Obama has expressed frustration with lawmakers, who have held up his jobs plan on Capital Hill.

Anya Kamenetz is author of "DIY U" and a senior writer for Fast Company magazine. She's written "The EduPunks' Guide to a DIY Credential," a free book published in conjunction with the Gates Foundation that "comprehensive guide to learning online and charting a personalized path to an affordable credential." She talks about the benefits and shortcomings of the president's plan.

Comments [19]


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Mar. 07 2013 04:25 AM
Kyle from Cleveland

Student loans are the most part risk free for the lender. You can't shed them in bankruptcy, there is really no way to get rid of them. Unless you die, you've got to pay them back. So why is it that they have such high interest rates? Isn't it supposed to be that sure bets have the least return?

Oct. 27 2011 12:20 PM

This is ignorant. You're not paying for anything. There is a huge mark up for college expenses like textbooks. Also if people aren't crippled by student loan debt they'll be in a better position to take lower paying public service jobs and spend to stimulate the economy.

Oct. 26 2011 01:22 PM
Thos from SW Missouri

I can't believe the number of people talking forgiveness of their student loans. They alone created their debt and they alone should pay for it, not the public. I can see giving them the ability to refinance at lower interest rates but not forgiveness.

Oct. 26 2011 12:00 PM
flower1 from NY

Nick Shorr is absolutely right in his analysis. They should also remove some music programs like orchestras. I am professional concert pianist myself and these God awful school orchestras teach nothing. Music should be out of school (ok to have some singing classes). We buy cheap horrible instruments for the kids and pay millions of dollars because unions and school officials have special contracts with companies. I could buy the same from China for a tenth of the price on ebay but they won't let you.

Oct. 26 2011 11:16 AM

forgive all student loans. and screw the banks.

Oct. 26 2011 11:10 AM
StefaniD from Florida

I had a portion of my student loans forgiven by US for each year I spent working as a nurse in an underserved area. At the end of 3 years, the debt was repaid and I had 3 years of great experience in an inner-city hospital.

Oct. 26 2011 11:10 AM
Randall Biggs from ca

Response to Chris from Brookliyn,
Chris I understand your frustration with the job market but no one promised you a job just because you wanted a college degree. Your comment that "society didn't uphold its end of the deal by making college worth the cost" is not a responsible.
You made the decision to go to college and selected the courses you felt were in your best interest.
Yes you should go to work and unload trucks maybe you could convince your manager that you have more to offer and get rewarded for your efforts and decision making.
What employers do look for is a person who is responsible for his own actions and that includes his debts.

Oct. 26 2011 11:10 AM
Tim from illinois

lowering the Interest rate doesn't lower our payment or amount owed! combined my wife and I owe over $198,000.00 in student loans, and Im considering going back to school for a masters degree. This will add an another $25,000. Im not saying id like to not repay any of it, id like to see some of it forgiven though based on our occupations!

Oct. 26 2011 11:10 AM
Prof Halospawn from Salt Lake City

Dear Edwardburke,
As an academic burdened by crippling student loans, I too am skeptical yet cautiously optimistic. While your comment illustrates a clear understanding inflation, it unfortunately assumes that it is the principal determinant in the rising cost of higher education. Firstly, inflation on education services is not as insular to the end product as say a pair of shoes. Inflation occurs at multiple stages in a system. I don't claim to understand tuition increases at private intuitions, but I am well aware of the factors public state institutions. Firstly, a state's budget to subsidize higher education is typically one of the first things cut during hard economic times, and is often viewed as a choice between elementary schools and colleges--one is mandatory while the other its optional. Secondly, direct federal funding has decreased. Thirdly, competition for the remaining federal grants has dramatically increased. Not only have private donations and private grants diminished, but restrictions on how these funds are used have increased. Finally, the mission of a university is not just to educate young adults, but to create new knowledge through research, the cost of which has increased with the increasing demand for specificity. As a member of the service sector, universities are truly dependent upon the quality of our personnel. If we cannot provide competitive compensation, our best faculty will leave, which leads to a general negative spiral of diminishing enrollments and increased tuition. Its not surprising that university administrations and faculty are running leaner than ever--we just aren't hiring anymore, nobody has received a raise in 5 years, benefits have been stripped, and teaching loads increased. So, with diminished funding, higher education is forced to shift the burden to students through tuition increases, but trust me it was a last resort.

Oct. 26 2011 11:09 AM

No discussion on how this is a unilateral Presidential fiat made for obvious political reasons and how last year's Democrat Congress created the current student loan programs on their terms?

Oct. 26 2011 11:06 AM
Brad Smith from Kenosha WI

I have over $130,000 in SL's from undergrad science and Dental School. I then when went into the military but at the time they didn't have SL repayment or scholarships. So I have been paying nearly 1k a month for 17 years and I still owe 100k. The interest is a joke. So now I'm 50 and stuck working in a public health clinic just so I can qualify for SL repayment. My dream of retiring early, ha!! What a joke. The government won't grandfather the rule 10 years as a public servent for loan forgiveness.
How about it Mr Obama??? How about forgiving someone who has paid more interest than the principle and served his country through 3 wars??? Right, won't happen. I feel like the rest, I should walk away but I don't want them to go after my decedents. A disgruntled vet.

Oct. 26 2011 10:49 AM

College costs (rates of tuition increase) have been rising well in excess of the rate of inflation for YEARS now, perhaps even decades, but at least within the past twenty years: two, three, and four times the rate of inflation. Has any intrepid journalist gotten to The Bottom (a rename I offer for your show) of where all this money has been going? Did it go to administrative costs? student athletics? infrastructure upgrades? new dormitories? Your guest offered not one clue about what explains this year in-year out, decade in-decade out rise in the price of "education" so far out in front of the at-large economy's rate of inflation. A second topic your guest, your producer, and your illustrious anchors failed to broach: the push to "educate" (quotes desperately needed). The Federal accommodation of students to loans (and universities to students with loans) is on par with the misguided Federal policy to foster home ownership among a broad swath of society with no means to support the ambition within the economy. Not everyone needs to own a home, not everyone needs a college education; and NO ONE needs a college education who requires remedial education at the doorsteps of their baccalaureate career. Every remediation program offered by every college and university can safely be scrapped by the end of the present academic year just to start with. Then, we can examine just what kinds of graduates we're accumulating. It seems now that no one paid the slightest attention to the number of houses being built in CA, AZ, NV, FL in the decade before 2008; anyone who had bothered to look at the sheer volume could well have predicted the glut that resulted. Similarly, how many sociology, psychology, "education" degrees do we really need? How much demand in the economy exists for such valuable degrees? --Id est, what exactly explains how people have come to be so damned stupid about what education is and what the economy can support? Your segment did next to nothing to illuminate these issues, and Obama's plan (coming from the man thoughtfully sending his daughters to private school) only threatens to maintain the status of the elite education quo of the vaunted Northeast Corridor, and the domestic culture of provincial cosmopolitanisim will thrive for yet another decade or two, hoorah and hooray.

Oct. 26 2011 10:15 AM

Beware of politicians and journalists telling you what you want to hear.
Why no mention of teachers unions, what academics are being over paid and the absurd courses being offered which contributes directly to these self inflicted "crippling" loans?

Is Obama pandering yet again for personal political reasons by irresponsibly spending other people's borrowed money?

Does "expanded options for forgiveness" mean the President who ran up the highest debt in human history should borrow more money to pay off student debt with money the government doesn't have to convince people to vote for him again thereby further "crippling" the economy with debt and limiting job opportunities?
And this is supposed to be the adult in the room?

Did Obama's economic policies saddle this nation and generations ahead with "crippling" debt?
Who will forgive that debt of a crippled nation in the 21st Century and at what price?

We need to have a serious adult conversation about this issue and not simply more political pandering by a billion dollar Presidential campaign kicking the can down the road with vapid cheerleading from the media.

Oct. 26 2011 09:58 AM

Did John Hockenberry just compare AIG and student loans?

If students taking federally-backed loans could collateralize their loans as AIG did, and pay them back with interest as AIG did, we woujld not now be talking about a national student loan problem.

Oct. 26 2011 09:50 AM
Nick Shorr from Pittsburgh

Even before the recession, the cost of college (and grad school) was getting beyond the realistic reach of more and more Americans.
I think I heard that it has had the highest annual rate of increase of any expense category for several decades... and I believe it.

We have a choice. We can make both undergrad 4-year college dramatically more affordable, so that any family can afford to pay it outright or to take out loans for realistic amounts. Or we can continue on the track we're on: a society where college educ is an elite privilege.

Our politics, our social life, our economy, our sustainability, our civilization all depend
on the outcome.

It seems there are four factors here, and all of them need to be looked at with a hard, close eye:
1) Big Science (the costs of cutting-edge high tech equipment in physics, chemistry, molecular biology).

2) Big Sports (the costs of ever-new, ever-larger stadiums, etc)

3) Big Infrastructure more generally (ever larger, newer, more luxurious dorms, classrooms and other buildings, etc)

4) Big Prof Salaries. Obviously there are plenty of very-low wage adjuncts. However, do we really need to pay someone $100K or more if they a) have lifetime job security (unheard of anywhere else in the economy), and b) are pursuing inquiry and sharing with students what they most love in all the world??

Oct. 26 2011 09:39 AM
Chris from Brooklyn

I really see no reason to pay back my student debts. I took on loans (thankfully only $14,000, though it disgusts me to be thankful for such an onerous load) on the faith that going to college results in a middle class job. I got two B.S. degrees. Serious stuff, Physics and Mathematics. I worked hard to maintain a scholarship, but still had to take loans. After college I've had no job prospects. Financially, I was better off working a trucking dock straight out of high school. And so, I've defaulted on my loans, because society didn't uphold its end of the deal by making college worth the cost. I just won't pay the cost. As for the damage to credit, I have no faith that I could ever buy a house participate in a major financial transaction, so credit doesn't matter.

Oct. 26 2011 09:23 AM
Ethan Lieske from Clinton Twp

Stretching out the payments does not fix the problem, 50k in loans to get a job that pays 40K a year is the problem. I'm one of the lucky ones, I can pay for my loans, but I can't buy house.

Wonder how the economy is going to do when every one is starting 25k (average) in debt.

Oct. 26 2011 09:16 AM
Achille Bianchi from Detroit

I think that with the recession combined with the massive debt and lack of jobs is scary. We need to interest rates or get businesses hiring - or we need a friendlier environment for entrepreneurs.

Oct. 26 2011 09:09 AM

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