The debt ceiling debate may return to the center-stage of American domestic politics. According to the recent analysis, the US Treasury may hit the current debt ceiling in between October 18th and November 5th. However, the CBO projection shows that the federal deficit is on track and it is recorded at all time low under the Obama Administration. But now the main focus of the government is to lower the private debt carried by the young American students and their families.
Well, the student loan debt is taking a serious shape in America, and for years, the president focused on the issue of student loan. He referred student debt problem as his own problem. He stated that he just managed to pay off his student loan before becoming a US senator. In August 2013, he presented a new student loan proposal, but he along with his administration failed to highlight any specifications. Obama’s administration sent an email stating that the plan is inclusive of various reforms that may bring significant changes in the life of the student loan borrowers. However, the proposed plan comes with a caveat; especially, for a group of people who’ve made higher education their business.
Obama’s announcement of the proposal hints at a specific direction of the policy, but the plan is actually vague. The President has criticized about the incessant increase in the tuition fees and warned a group of people who've made higher education their business. Well, it’s anticipated that he may create a plan that may go against the price-gouging colleges and universities.
As a matter of fact, the high college funding is one of the serious issues in the US; at the same time, the degree is crucial to bag a good job. The cost of higher education expenses has skyrocketed and average middle class income group are unable to manage to bear the expenses. Most of the middle class families take out loans more than $26,500 on average. Well, it’s a sheer gamble as they hope that the job will pay enough for them to repay the owed amount after post graduation. Since the great economic meltdown, most of the borrowers miserably failed to pay back the owed amount. After the colossal financial collapse, the fresh post-graduates didn’t get a job in the sluggish job market and it complicated the situation.
Most of the defaulted borrowers are struggling to make the payments on the owed amount and to get on the right financial track. However, this is a personal debt problem of every individual but on a larger scale it’s a national crisis. The post-graduate students failed to get a job in this economy and found find difficult to make ends meet. Therefore, in this scenario, they may not be able to buy homes or build their assets and fail to contribute to the economy. In reality, $1 trillion in student loan debt is looming on the economy and it can be one of the major reasons for slowing down the economic growth.
The President is giving priority to the the higher education plan in the list of the political issues. The plan “Pay as you earn” implemented last year limits student repayment on Federal loans to 10 percent of their income, and the remaining balance is forgiven after 20 years. Therefore, this payment plan can be beneficial for him for students who took out federal loans.
But you can’t vouch on all the president’s plans considering it to be successful. As a matter of fact, reducing the interest rate on the student loan seems to be excellent on the short term basis. But the rates are expected to increase shortly, especially once the economy improves.
Therefore, the student loan borrowers can expect bold student loan solutions coming out of state governments, especially in Oregon, which recently approved "Pay It Forward." This is a plan that may enable students to defer payment until after graduation.For more information on loan visit here: http://www.debtconsolidationcare.com/loan.html