President Orders Changes To Student Loans
CHICAGO (CBS) -- The burden can be daunting for college students who wonder, "How will I pay off my student loans?"
On Wednesday, President Barack Obama outlined measures intended to lighten the load on college grads, by lowering their payments.
As CBS 2's Roseanne Tellez reports, the help can't come soon enough for some students.
The average student loan debt for 2009 graduates at four-year non-profit colleges was $24,000.
And, according to the U.S. Labor Department, the unemployment rate for college grads is higher than it's ever been.
Some students are pretty nervous; worried they'll have loads of debt and few job prospects.
Obama said he knows the problem first-hand and told a crowd gathered in Denver on Wednesday that, by the time he and the First Lady graduated from law school, they were $120,000 in debt.
"We combined our liabilities, not our assets," he said. "We were paying more for student loan debt than our mortgage each month."
To offer assistance, the President – by executive order – outlined these changes to student loans:
• Limiting student loan payments to 10% of a graduate's income, down from 15%;
• forgiving outstanding debt after 20 years, instead of 25;
• and allowing students to consolidate loans in order to cut interest rates.
FOR MORE DETAILS ON THE STUDENT LOAN PLAN, CLICK HERE
Many students at DePaul University said they liked the plan.
"It's the only way I could pay for school," Alyson Pedro-Gonzales said. "I've taken a good amount out."
So does she like the plan? "Definitely," she said.
"Enough Americans are already in debt especially students," said student Jake Fessler. "Enough students will come out of school and not have any job because of the economy. It will be like that for years. Anything to help is good."
Obama said college needs to be more affordable if the U.S. is to be competitive. But some students were cynical of the president's plan.
"So I think he's trying to reach out to the younger voters in order to get their votes," said Douglas Henry. "It's a very good strategy."
Aside from mortgages, student loans are the #1 source of household debt. The White House said that the new changes could save some borrowers hundreds of dollars a month.
