President Barack Obama has given credence to one of the issues most espoused by young Occupy Wall Street protesters: Student loan debts are crippling recent college graduates who are unable to find jobs.
In the United States, student loans are the second largest source of household debt. Obama has offered a plan that he says will ease that burden and free up money for first-time homebuyers and other consumer spending.
The President’s plan will speed up a measure passed by Congress that reduces the maximum required payment on student loans from 15 percent of discretionary income annually to 10 percent. It will go into effect in 2012, instead of 2014. The White House also says the remaining debts will be forgiven after 20 years, instead of 25, according to MSNBC.
In addition to the student loan plan, the Administration is partnering with the Small Business Administration to offer specific programs that will promote young entrepreneurship. The Student Start Up Plan offers recent graduates options to defer student loans and provides informational material for young, business-minded individuals.
Many Republicans are opposed to Obama’s plan, saying deferment will result in financial strain on lenders and poorer service to borrowers.