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Students happy about plan to lower student loan payments

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WILMINGTON, NC (WWAY) -- As the economy sags many college grads find themselves burdened by student loan debt while struggling to find a job.

Today President Obama announced a plan that could provide some relief through lower student payments. For students at cape fear community college, it's exciting news.

"I think it's very good, because there are a lot of people that are having money issues and are in debt because of loans, and it's kind of hard to find a job when you get out of college," CFCC student Shameque Dowe said.

College grads can breath a little easier. President Obama announced an income-based repayment plan to reduce the required payment on student loans to 10 percent of annual income. That means anyone without a job after graduation will not be forced to pay anything until they have the financial means.

"I think it will be helpful with the economy the way it is and their not having jobs," CFCC Assistant Financial Aid Director Rachel Cavenaugh said. "It will give them some relief."

The executive actions will also allow borrowers to consolidate their loans and get a lower interest rate. That will help students like Hailey Heflan. She receives financial aid now at CFCC, and when she transfers to a four-year university she plans to take out even more student loans.

She says many of her peers are in similar situations.

"I have a lot of friends who are already struggling with student loans, and once I tell them the news they'll be excited, too," Heflan said. "They will be able to pay them back as soon as they can, but have a longer time, because they will be cut down."

CFCC officials say that they do not expect an increase in student applicants or loans because of these changes.

Still some students say they are just thankful for the help.

"If I get out of school, I am going to need the money to live, because some people don't have no where to go," Dowe said.

The plan was supposed to go into effect in 2014, but President Obama now says it will now start next year.

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Vote Buying

More vote buying from Obama.

First he took over the student loan industry, so there's no free market competition. Very few people realize that the student loan takeover was part of the ObamaCare bill - because the "savings" from the loan takeover were needed to make the #'s work for ObamaCare.

Now that the Fed gvt has all student loans, Obama wants to create more bureaucracy, hire more gvt workers, and this will save students .... less than $10/month.

Yup. And it will cost the taxpayers a lot - because we're on the hook when these students default, and when the Obama admin changes the rules yet again to offer loan forgiveness even earlier.

Great article here: http://www.theatlantic.com/business/archive/2011/10/obamas-student-loan-...

Student Loans are the symtom

Anything to relieve the strain on students strapped with student loans difficult to repay in this tough economy is commendable. But why is Obama treating the symtom and not going after the real problem... expensive runaway college tuition expenses?

Every effort to make loans easier, less expensive or increase grants is just creating "enabling" behavior on the part of these institutions. Where is the moral outrage against colleges and universities like we see in NY? How about a "Occupy UNCW" or "Occupy Duke"?

OhByTheWay in Wilmington NC

Not to be negative

but do not count your chickens yet.

If the bill is dependant on funding in a tight economy where every month or so the House and Senate have to find some way to continue funding government, there may not be funds available.

How is this dependent on

How is this dependent on funding in any way? This is about the amount of PAYMENTS RECEIVED. If the government is 'counting' on this money being collected every year, in a country where millions of college graduates are lucky to get a job at Starbucks, its no wonder the economy is collapsing.

10% of 25,000 - 40,000 a year is a helluva lot better than 25% of 0. Give graduates a chance to succeed.

I guess you missed

reading comprehension. My post included the word "IF".

and that is a credible word to use when one is dealing or planning on a deal from the Feds.

If the Federal budget is calculated on a certain number of dollars being repaid, and that magic number is symbolically cut by the White House occupant, it's not real until the budget is revised or amended.

The money has to come from somewhere.

Obama and student loans

This program is simply aimed at gaining votes for Obama in the next election. It places more burden on the taxpayers. This is another bailout and is a bad program. However, I am sure the students will like it since they can stretch out their payments or maybe get off without paying anything.

I don't understand what he's

I don't understand what he's wanting to do that's not already done. The direct loan federal student loan program ALREADY offers income based payments that is based, I believe on an exact 10%. You pay the monthly payment until 50 years. If there is a balance owed after 50 years, it is dissolved.

I am a student myself and while unfortunately, I was forced to carry student loan debt, my repayment method of extended graduate was cheaper than income based, as will be for almost all graduates unless they are simply not employed. In addition, you have a 6-month grace period after graduation and if you are not employed, you can file for an additional extension.

Maybe Obama needs to do a little research.

The plan is being changed.

The plan is being changed. The IBR is now 15% of income and now only 10% of that is looked at. Also, it used to be that after 25 years the loans are forgiven, now it is 20. Also, if you consolidate your FFEL loans with Direct loans, you will get a 0.25% interest rate reduction. Not a lot, but anything helps.

Winning Votes

I could not agree with you more Robo... This is his way of winning the idiot vote(not all students are idiots) but misinformed and mostly feel "entitled". Because he is ringing the "come and get it bell" he will win their votes....

This man has a way of saying what you want to hear and then falling WAY short.. God help us in the upcoming election...

UGH