With the presidential election right around the corner, both parties are now revealing their platforms. And one of the major planks of President Barack Obama’s re-election platform will involve student loans.
The Democrats’ platform talks at length about the strides President Obama has made in increasing protections for consumers from student loan debt. The administration doubled the amount of money invested in the nation’s Pell Grant program and created a benefit known as the American Opportunity Tax Credit, which allows consumers to write off as much as $10,000 in college-related expenses over four years of school.
But a major tenet of the re-election platform would also allow consumers to keep their student loan bills affordable after they graduate. If re-elected, Obama has said he would work to make sure that a monthly student loan bill does not exceed 10 percent of a borrower’s take-home pay. Further, the new system will also attempt to make a higher education generally more affordable for students.
“President Obama has pledged to encourage colleges to keep their costs down by reducing federal aid for those that do not, investing in colleges that keep tuition affordable and provide good value, doubling the number of work-study jobs available to students, and continuing to ensure that students have access to federal loans with reasonable interest rates,” the platform said.
Further, the Democrats pledged to continue their investment in the American community college system, and call for local businesses to partner with these institutions to provide more students with skills they’ll need to fill jobs that currently sit vacant. That, in turn, could lead to more recent graduates finding work soon after they leave school, which would in turn bolster the economy and give more borrowers the ability to stay current on their student loans.
Meanwhile, the platform also points out that Republican nominee Mitt Romney’s plan would eliminate financial aid for more than a million students nationwide. That’s in addition to plans to slash the Pell Grant program significantly.
Today, the average college student graduates with tens of thousands of dollars in education loan debt, and given the current state of the job market for young adults, it can be difficult for many to afford the payments they face. This is particularly true for those who have private student loans, which have different repayment rules than those from the federal government.
Image: borman818, via Flickr