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Obama plan intended to provide student loan relief

November 10, 2011

MOLLY BOWMAN
Staff Reporter

 

President Barack Obama has unveiled a new student loan plan that can potentially lift some of the financial pressure off Tech students’ shoulders.

 

The new plan stipulates that maximum required payments on student loans will be reduced from 15 percent of discretionary income to 10 percent in order to reduce monthly payments for borrowers, according to MSNBC.com.

 

Roger Vick, director of student financial aid, said this will really only benefit students taking out substantially high loans.

 

“It will give some people with high borrowing levels some benefits, but you have to remember there are a lot of details that those figures don’t tell you,” Vick said. “You’ve got to be on time and pay your loans regularly, and you can’t have been in default,” he said.

 

Anna Brewer, a sophomore pre-nursing major, said some students need to reconsider going straight to college after high school.

 

“It’s not the time for all students to go to college because of the economic situation, especially if you are going to school and don’t know what your major will be,” she said.

 

“Unless you can afford it, you are acquiring a lot of debt and wasting money on what you are uncertain about. Students should work and save money to go to school when they are certain of their future.”

 

By the end of the year, outstanding student loans are predicted to reach $1 trillion, according to CBSNEWS.com.

 

Vick said some of the reasons for this high figure are because many students borrow money to go to a school of their choice, not necessarily to get an education.

 

“There are many ways to go to school that can minimize costs,” Vick said. “If you live near a community college, that’s a great start for students beginning college that are not going to get scholarships. Their classes cost less to attend, and it would make a lot of sense.”

 

In the past year, tuition costs have increased more than 8 percent at four-year public universities, according to MSNBC.com.

 

Vick said 3,197 Tech students took out loans this fall.

 

“Costs of operating a university have gone up over the years,” Vick said. “It’s not just that everybody is getting a big raise. It’s because utility costs go up, construction costs go up and maintenance costs go up. I think Tech has done an admirable job of keeping their costs down.”

 

Some Tech students like Kesha Jean-Batiste, a sophomore merchandising and consumer studies major, said she believes loans are a good thing for students, but can bring them unexpected debt.

 

“In a way, it’s beneficial because sometimes students don’t always have the money to go to school,” she said. “Loans allow you to not have to pay for it all at once so students are able to go to school. I was able to use loans but didn’t realize how much debt that I encountered.”

 

Student loans are the second largest source of household debt, according to MSNBC.com.

 

In order to succeed in paying off loans in a timelier manner, Vick said students need to lower their living standards.

 

“When students are in school, it should be a lifestyle choice,” he said. “They should be keeping their costs to a minimum as a student instead of borrowing to try to maintain a lifestyle that they had at home with their parents. Inconvenient and uncomfortable at times it may be, but it certainly saves you from a lot of borrowing in the end.”

 

Email comments to mmb041@latech.edu.

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