Obama’s Student Loan Forgiveness Plan Will Do Liitle

Francine Zorc | October 26, 2011 | 0 Comments

It might have taken him almost his first term as president, but during his three leg campaign tour in California, Nevada and Colorado Barack Obama announced that he has decided to bypass what is dubbed the do nothing Congress to offer some kind of help to struggling students – a very important voting block for his 2012 reelection to the White House.

With the Occupy Wall Street movement heavily supporting a plan/petition called “Forgive Student Loan Debt to Stimulate the Economy and Usher in a New Era of Innovation, Entrepreneurship, and Prosperity” aka Student Loan Forgiveness to help underprivileged young people with mountains of student loans, during a stop at the University of Colorado in Denver, Obama announced that he has used his executive privileges to come up with a concept that would aid some of the millions of low income people currently pushing the student loan debt to $1 trillion.

Mr Obama said during his speech that him along with First Lady Michelle had over $120,000 in law school debt and added:

“I’ve been in your shoes. We did not come from a wealthy family…Our economy needs it right now and your future could use a boost right now.”

The unfavorable Student Loan Forgiveness plan that would be effective starting January 1st, 2012 instead of 2014 scheduled by Congress will help a first group of 1.6 million borrowers because it will cap their monthly loan repayments at 10% instead of 15%.

Another 5.8 million borrowers will benefit from Obama’s Student Loan Forgiveness plan thanks to the fact that it will permit those who have a loan from the Federal Family Education Loan Program and a direct loan from the government to consolidate them into one and therefore at least 1,5% less on their monthly payments.

Many Americans disapprove of the plan because they feel that Obama is telling the youth that it is normal to default and have no responsibilities for their actions because the federal government is there to forgive those who can not pay their loans.

Others have voiced their opinion stating that Obama should have at least asked those benefiting from the break to give something to their communitie­s.

And unlike what the president claims, several economists have explained that his plan will not help put Americans back to work and strengthen the economy.

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