President enacts student loan relief for some - abc27 WHTM

President enacts student loan relief for some

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Commencement season is here. However, many post-grads will quickly learn pomp and circumstance turns into prompt and secured payment. A study that polled college grads since 2012 found that seven out of 10 say their loans are "unmanageable."

As many struggle to enter the workforce, let alone a position in their studied field, students graduate with an average $30,000 in debt.

On Monday, President Obama signed an executive order that would bring relief to at least five million borrowers.

"At a time when higher education never has been more important, it's also never been more expensive," the President said.

The President bypassed Congress and expanded the Pay As You Earn (PAYE) federal program. Borrowers enrolled in the program can have their monthly bills capped at 10-percent of their income, down from 15 percent.

For example, a student who owes $20,000 in student loans and earns $30,000 a year will have their monthly bill dropped by $110.

Jenna Chavis said student loans have brought an uneasy burden on making ends meet, even after being out of school for more than seven years.

"It's a relief,” she said. “Paying student loans is definitely a hardship, just with salary and other obligations. It will be a good idea."

The President also expanded forgiveness. Not just doctors, but most public service workers will be able to have outstanding student debt forgiven after 10 years of consecutive prompt payments. Nurses, teachers and military members are some of the careers the program now includes.

Teacher Dev Kaneria said this is a long time coming for educators.

"I think we do a great public service every day,” he said. “I think it will help us out a lot."

For the rest enrolled in PAYE, outstanding debt will be forgiven after 20 years, down from 25 years. The stipulation is the law will not go in effect until December 2015. Currently, there are 200,000 people enrolled in PAYE, but a national group reports nearly 18 million qualify and do not know it.

However, some critics argue the President’s executive order does not go far enough nor does it address the high interest rates or rising tuition. More than 40 million people in the U.S. owe a collective $1.2 trillion in student loans, more than auto and home loans.

Tuition for four-year colleges has increased 250 percent since 1984. Since 2005, 11 percent of borrowers are delinquent on their loans and are unable to cover payments along with other basic living bills.

Chavis hopes the new reforms will allow a future class of freshman the ability to begin with less burden.

"We have our future teachers, our future doctors, police officers all in the classroom,” she said. “So, why not say, 'Hey future teachers, here's a little bit extra to look forward to."

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