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President Obama Announces New Student Loan Debt Relief Plan

On Wednesday, President Obama announced a new plan that makes federal policy changes involving student loans. Beginning January 2012, the plan will limit loan payments for some students to 10 percent of discretionary income. As a result, monthly payments towards student loans could be reduced significantly for many borrowers. This change will come about two years before the plan was scheduled to take effect. In addition, any debt that remains on federal loans will be forgiven after twenty years, instead of twenty five. The plan also offers students the option to consolidate loan debt on federal loans which could significantly reduce interest rates. With student loan debt now exceeding credit card debt in the United States, the President’s policy changes are a significant step towards addressing the economic issues dealing with higher education.