Washington, Oct 27: US President Barack Obama Wednesday unveiled a plan that would help relieve the burden of students struggling to pay their loans.
‘We should be doing everything we can to put a college education within reach for every American,’ Obama said at the University of Colorado in Denver.
‘It’s never been more important, but, let’s face it, it’s also never been more expensive.’
The president quoted a new report which showed tuition and fees at US universities have gone up faster than inflation.
‘Over the past three decades, the cost of college has nearly tripled. And that is forcing you, forcing students, to take out more loans and rack up more debt,’ Xinhua quoted him as saying.
The president offered a plan to provide some relief for millions of Americans on their student loans.
The plan would accelerate a measure, already passed by the Congress, to reduce the maximum required payment on student loans from 15 percent of discretionary income annually to 10 percent.
The measure was scheduled to be implemented in 2014, but Obama said it would be put in place by next year.
The plan would forgive the balance of student loans after 20 years of payments. Additionally, starting January, an estimated six million students and recent college graduates will be able to consolidate their loans and reduce their interest rates.
The move came as US students borrowed an unprecedented amount of money through federal loan programmes last year.
The amount of student loans taken out last year surpassed $100 billion for the first time and total loans outstanding will exceed $1 trillion for the first time this year, according to a recent USA Today report.
‘Living with that kind of debt means making some pretty tough choices when you’re first starting out,’ said Obama.
‘It might mean putting off buying a house. It might mean you can’t start a business idea that you’ve got.’