The issue of student loan debt is something every college student who has ever received a loan can understand. Though there are payment plans implemented to assist in the payback process to the government, students still struggle to make the deadlines. The recession and lack of available extra jobs has affected that even more. Without a good enough income, it’s almost impossible to pay off student loans and afford rent, bills, and everyday living.
Obama had a plan to change that which he implimented in the healthcare reform law last year. The concept lies in “cutting out the middle man”. Originally, private companies made the loan and the government subsidized and guaranteed it. By taking the private companies out of the equation, Obama believes to save taxpayers billions in subsidies.
CNBC Correspondent Scott Cohn still sees fault in this, stating the money saved is barely putting a dent in the cost of college nowadays. In 2008, the cost of a non-profit private college overshot financial aid by $26,000 dollars. Things haven’t changed by much, even with Obama’s new bill. Students are getting government student loans as well as privately funded loans to make the difference.
The ideology behind Obama’s plan is an admirable one as he tries to save money in one arena and funnel it in to another one, improved education. The downside is the government customer service is lacking so, if any student has a question about their loan, expect to wait awhile before getting an answer. This is opposed to a private lender who is more available and particular about its lending program.
The student loan debt hits even harder for students in the medical and law field who attend school for often ten years at a time. Will the reform bill hold a positive outcome for students in the future? For now, it’s too early to tell.