Student Loan Situation Needs Major Overhaul

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.