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Obama unveils new student loan payment rules

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Wednesday, October 26, 2011

President Barack Obama announced a plan to let Americans consolidate and reduce interest rates on their student loans.

The new rules that take effect next year include provisions will allow students to roll different loans into one federally-backed package with a lower interest rate; Obama said up to 1.6 million students could see debt payments go down by hundreds of dollars a month as they pursue college educations.
"It's never been more important, but, let's face it, it's never been more expensive," Obama said. "Our economy needs it right now and your future can use a boost right now."
As he has on other items this week, Obama said he is issuing executive orders because congressional Republicans are blocking his proposed $447 billion jobs plan.
"We can't wait for Congress to do its job," Obama said. "Where they won't act, we will."
The speech wrapped up Obama's three day swing through the West, as he spoke at campaign fundraisers and issued a flurry of new executive orders while bashing Congress.

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Lisa
0 #1 Unintended Consequences and other Roads to HellLisa 2011-10-26 11:58:18
This sounds nice but like many well intentioned ideas, there are unintended consequences. There has been a lot of information that supports the reality that the more "student aid" available the higher tuition rates. The increase in college expenses have greatly outpaced the increases in other costs. The higher the rates, the more that must be paid and/or borrowed. There is talk of tuition and student loans being the next "bubble" to create economic havoc.

Further student loans seem to be the only loans that one can obtain without showing ANY ability to repay them. Another recipe for disaster. Borrow $1000 for furniture or electronics and you will have to prove you can pay back the loan. Borrow ten or a hundred times that amount for college and there isn't any accountability. If nothing else, students should receive counselling on how much their intended course of study is expected to return in the form of future gainful employment. Spending a hundred grand for some obscure or impractical degree and trying to pay it back working at Starbucks is not a very good idea. I don't see that many engineering or accounting graduates wailing they can't pay back their loans. However getting a master's in Gender Studies is unlikely to be worth the investment from an economic point of view.

Obama's latest plan just sounds like another vote buying concept. Trying desperately to retain the youth vote that helped get him in office he's offering goodies instead of a healthy economy. I hope this latest scheme gets all the support it deserves.
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