College Loans

College Loans: Any Solution?
      Obama’s proposals to make college education more affordable constitute a controversial issue. Valid arguments can be made on both sides. The Obama administration proposes to reduce the interest rates and have graduates pay no more than ten percent of their incomes. The balance of the loans would be forgiven after twenty years. Opponents argue that these proposals add to the huge budget deficit because the taxpayers would be stuck with the debt. The opponents place the blame on predatory lenders and the rapid and inflated growth of college tuitions, which leads to possible loan defaults or even bankruptcy declarations from borrowers.
      The Obama Administration has initiated a new program called “Pay As You Earn”, which is where your income versus the amount you pay comes into play. Along with this the Administration has stated “The new “Pay As You Earn” proposal will allow about 1.6 million students the ability to cap their loan payments at 10 percent starting next year, and the plan will forgive the balance of their debt after 20 years of payments”, which is only the beginning since there are many more borrowers that will seek benefit from this program. The reason why they have launched this new program according to the Administration is because “College graduates are entering one of the toughest job markets in recent memory, and we have a way to help them save money by consolidating their debt and capping their loan payments. And we can do it at no cost to the taxpayer”, at least that is what they are hoping to accomplish with this. Unfortunately there are a number of experts who oppose this program whose reasons will be expressed thoroughly.
      Anya Kamenetz, author of “The Edupunks’ Guide”, mentions how over 36 million Americans hold over 1 trillion dollars in student debt combined. That is around 8 percent of our national debt as a country just in student loans. Kamenetz agrees with Baum in the sense that the program...