CARBONDALE, IL (KFVS) - In a move designed to help keep young Americans out of debt, President Obama uses his executive powers to help college graduates repay their student loans.
The President's plan would allow borrowers to limit their loan payments to 10 percent of their income after monthly bills. After 20 years, loan companies would forgive any remaining debt.
The President also wants to make it easier for student loan holders to consolidate their loans at a lower interest rate. The idea is to help grads hold onto more of their money to get though these tough times.
"People don't think about the dangers of student loans," said Attorney Jay Howd with the Bankruptcy Clinic, PC of Carbondale. "A lot of people think it's just free money, but it's not free money, it does come due."
Howd sees all too often students who took on too much debt in college and collapsed under it after graduation.
"I'm sorry to say, more and more people are using student loans to subsidize their standard of living," Howd said. "They're using student loans to survive."
Once they graduate, borrowers have a grace period of six months to a year before they have to start paying for their education, and in this economy it could easily take that long just to find a job.
"Many students feel they can wait until graduation, put it off, they don't need to think about a job search until they're done with school," said SIU Career Services specialist Michelle Garrett. "They need to start much earlier than that."
SIU Career services specialist Michelle Garrett recommends starting the job search six to nine months before graduation.
"They simply cannot wait," Garrett said. "The competition is fierce."
That's one reason SIU sophomore Bryan Arnold says he's thinking ahead and working to pay some of his loan off now, two years before graduation.
"Due to my family situation, I pretty much have to hold a job at all times," said Arnold.
SIU PhD candidate Ed Hackett also has loans to contend with after he earns his doctorate in philosophy. Still he says he'd rather see lawmakers work on lowering the cost of college instead of just making it easier to pay the loans off.
"I think the changes are cosmetic," Hackett said. "They're just making it easier to consolidate. It's not that college is being made more affordable in the long run."
President Obama said his plan will help not just individuals, but the economy overall, because graduates will have more money to spend on things like buying homes.