By Dallin Hatch
The White House hopes changes in student loan policies will ease the financial burden of obtaining a university education. Speaking from Colorado University at the Denver campus on Oct. 26, President Barack Obama announced his plan to make it easier for college graduates to manage student loan debt.
Two of the largest proposed changes are with discretionary income and debt consolidation policies.
Discretionary income, or the money that is left over after paying for the necessities like food and rent, is used to determine where monthly payments could be capped. Currently, borrowers can cap their student loan payments at 15 percent of their discretionary income. Under Obama’s plan, the cap could be as low at 10 percent.
Debt consolidation, a completely new system proposed by the president, would combine all student loan debts into one monthly payment. Under the previous plan, students could have as many as five different student loan bills every month.
A recent report from the Department of Education showed the current outstanding balance of federal student loans at $610 billion.
Mike Coleman, a junior from Falcon, Colo., said the changes will actually help decrease the outstanding balance and ease his mind as he pursues his education.
“I think that I would be less stressed about taking out student loans due to these changes,” Coleman said. ” He [Obama] aims at making post graduation more manageable because the jobs just aren’t there right now.”
For other students, the plan only introduces more stress into the financial aid equation.
“[The changes] make me feel slightly in bondage to the bank,” said Jordan Turner, a freshman from Apex, N.C. “Rather than knock it out in larger payments, I’ll be stuck with due dates in the back of my head for longer periods.”
Despite the long term stress, Turner said he would rather take out student loans than take semesters off from school to pay his own way through school.
“I feel that education is a good reason to be in a bit of debt,” Turner said. “We have heard that from modern prophets, so this is one area where I feel everything will just work out in the end if we do our part.”