Friday, October 28, 2011
The Obama administration unveiled a plan this week aimed at reducing the burden of student loan debt, which now surpasses credit card debt in the United States.
The plan will let borrowers consolidate their government loans and government-backed private loans into one monthly payment, at a lower interest rate. It will also give people the right to cap their loan payments at 10% of their income, down from a current limit of 15%, and will allow student debt to be forgiven after 20 years, compared with 25 years under the law now.
Will the Obama plan make a difference? Will it help prevent defaults or will it lead today's students to borrow more, if they view their debts as potentially negotiable and if they believe the government is assuming more of the risk? What should government do about student debt and the college loan industry?
- Sandy Baum (Professor of Economics, Skidmore College), A Step in the Right Direction
- Richard Vedder (Professor of Economics, Ohio University), Subsidizing the College Bubble
- Anya Kamenetz (Author, The Edupunks' Guide), An Inadequate Response
- Neal P. McCluskey (Cato Institute), The Worst Lesson We Could Teach
- Cindy Warner (StudentLoanJustice.org), Compounding the Suffering