Recent data shows that the average college grad leaves school facing $25,250 in student loan debt, diminishing quality of life.

The Huffington Post reports in an editorial that while the government’s Income Based Repayment plan and the Proposed Student Loan Forgiveness Act are good starts, neither are enough to address the total scope of the problem.

Mitchell D. Weiss, the author of the editorial, suggests rather that the Income Based Repayment plan be extended to include private loans. He also suggests changing the bankruptcy laws to allow borrowers to discharge student loans, which would provide motivation for lenders to accept a workable solution.

He further calls for all reworked loans to have the same interest rates (3.4) and wants a maximum repayment cap of 20 years.

Whether all these ideas can or will be adopted remains to be seen, but the fact remains that student loan debt is something that must be dealt with.

July 1 is the date interest rates on federal subsidized loans will double to 6.8 percent if a deal isn’t reached in Congress. While both Democrats and Republicans agree that letting the loan rate jump would be a bad thing, they don’t agree on how to pay for the cost of keeping those rates down.

According to The Hill blog, both parties continue to suggest solutions, while accusing the other side of stalling, all the while the deadline approaches.

“My message is Congress is simple: ‘Let’s get back to work,’” President Barrack Obama said at the University of Nevada Las Vegas. “How many people can afford to pay an extra 1,000 dollars if you’re a student just because Congress can’t get its act together?”

Both sides have student loan rate plans still under development.

Student Loan Situation Needs Major Overhaul is a post from: The Inquisitr

College graduates could soon have an easier path to paying back student loan debt as the White House has turned its attention to lessening the burden on those making payments.

As the deadline approaches for Congress to extend the current 3.4 percent interest rate on student loans, the Obama administration has seized the opportunity to push a plan of its own in what could become a re-election issue, CNNMoney reported. Obama is proposing an easier way for students to enroll in an income-based repayment program, which allows them to pay 15 percent of monthly discretionary income and have their debt forgiven after 25 years.

The program has more than 700,000 participants, but Secretary of Education Arne Duncan said he believes millions more could benefit from it. The current enrollment process takes more than six weeks, as students must contact loan providers.

The new proposal would allow them to enroll on their own on the internet.

“We have a long way to go,” Duncan was quoted in CNNMoney. “Just by making the process much less complicated and more simple, we’ll hopefully see many more of our folks take advantage of this going forward.”

Obama’s proposal comes amidst inter-party fighting over the extension of the student loan interest rate. Though both parties agree on keeping the low rate, they have disagreed on how to pay the $5.9 billion cost that comes with it, the Kansas City Star reported.

Democrats have proposed increasing payroll taxes on some privately held companies, while Republicans have insisted on spending and passed a plan in the House of Representatives to cut funding for disease prevention and public health. That proposal has stalled in the Senate. Some politicians have even advocated for student loan forgiveness as a form of economic stimulus.

If no change is made, close to 7 million students would see their rate rise to 6.8 percent in July.

The student loan proposal is seen as an important election point for Obama, whose re-election chances could hinge heavily on the 18- to 29-year-old vote.

White House Looking To Ease Student Loan Burden is a post from: The Inquisitr

Student loans are kind of a hidden aspect of economic strife, because while a new car or home when income is dissonant is pretty obvious, you can never tell if someone you know paid a ton of money for college only to wind up working at the Steak n’ Shake when they graduated into a weak job market.

It’s also a bit terrifying that the way we used to talk about the housing bubble- you know, before the economy imploded in a ball of flames and stayed that way forever- is now the insistent and increasingly dire style of prediction emerging about the future of student loans and the economy. Recent reports have indicated that unpaid student loans have passed the one trillion dollar mark, and lawmakers are currently trying to find ways to head off a supposed coming crisis at the pass with measures such as the Student Loan Forgiveness Act proposed to deal with the problem.

One way to underscore how bad the situation may be, though, is inherent in a simple datapoint that The Atlantic highlighted earlier this month. While most people with outstanding student loans owe between $10,000 and $15,000- not a small amount in and of itself- 1% of borrowers owe a staggering $150,000 on their student loans.

The site quoted one unnamed borrower in the unenviable 1% of most indebted student loan debtors. The anonymous former student says they had no idea what they were signing up for when they took on the debt:

“I did not fully understand the extent of what I was getting myself into… All I knew was in order to pay tuition, I would need to take out private and federal loans. I was also repeatedly told by several people that I would easily be able to pay off the amount, even though it seemed pretty steep. When I graduated and fully did the math, I knew I was in trouble.”

Of course, we can certainly amend the way things work so that student loans are more difficult to get, but it appears that without some action from lawmakers, the student loan debt bubble could seriously derail the scant economic progress we’ve made since the last major bubble.

Student Loan Crisis Worsens, Top 1% of Borrowers Owe More Than $150K is a post from: The Inquisitr

Student loan forgiveness is a pretty sensitive topic right now- with some people strongly advocating a kinder, gentler approach to student loans, while others feel that no matter how oppressive, loans should be paid back as they were originally termed in order to teach borrowers “responsibility.”

However, the one most visible part of the student loans issues is its scope- by all accounts, we’re heading for another big economic setback if we just allow the situation to continue without action. In the past decade, student borrowing has skyrocketed along with climbing college costs, and an entire “lost generation” is not starting families, buying cars, getting mortgages or otherwise contributing economically in the ways previous generations did. And by all accounts, the problem is actually way worse than even shrill news reports indicate- young people are drowning in a sea of debt before they ever have a chance to pay back the first cent.

Late in 2011, outstanding student loan debt surpassed $1 trillion in the US, which is even higher than the original high estimates. Among the reasons cited for the uptick are an increase in students due to high unemployment, the effects of cutbacks in state funding and a higher number of defaults and deferments due to the economic meltdown.

Earlier this month, Rep. Hansen Clarke (D-MI) introduced HR 4170, known as the Student Loan Forgiveness Act of 2012.  Under the terms of the bill, some strong concessions (although forgiveness is a strong word, considering) would be given to borrowers to attempt to ameliorate the situation. Payments would be capped at 10% of a borrower’s income and bring forgiveness after 10 years of payments- still a significant chunk of change, but not as oppressive as the massive payments may debtors are crushed by.

Interest would be capped at 3.4%, half the 6.8% rate set to go into effect later this year. And provisions would be made for borrowers in low-income public service jobs, as well as for those who borrowed privately to refinance to federal loans. All in all, while it doesn’t entirely eliminate the obligation for borrowers, it looks like the Student Loan Forgiveness Act could provide some much needed breathing room.

All in all, do you think student loan forgiveness is an issue we should tackle now before it drags the economy down more?

Student Loan Forgiveness Act Could Help Unfreeze Economic Growth is a post from: The Inquisitr