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Many students struggle with their college loans.
The Obama administration is trying to fix student debt in order to help students. Nowadays going to college is worth a fortune and a lot of young adults come out of college with huge debt that can take years to pay off. This is why this administration is trying to focus on the issue that has been troubling college students for a long period of time.
Earlier this year, the Department of Education changed how a couple of things work in this area. They have forced colleges to give students more options with which they can access the aid that they are being offered. They have also been working on a federal program which would allow student loan payments to be directly tied to how much money the borrower is making.
This new approach that they are trying out aims to reduce the debt that college students can get and also make things easier for them when they do manage to graduate. Because that is when things truly become hard since most graduates struggle to find well paying jobs in today’s market.
The first target for this new program are the debit and prepaid cards that are being offered to students by colleges. While these might offer certain advantages to the student when he signs up, in the long run they will more often than not prove to be a trap. User fees that just keep going up and also the fact that they try their hardest to keep the students in the dark about other options that they might have.
These new rules will be taking effect in July 2017 when campuses won’t be allowed to offer students instruction on where to open a bank account. They will now be forced to offer the students a full list from which they can choose from, unless the student already has a bank account which could be used.
The other part of this regulation is that any student who finances himself can have his payments be capped at exactly 10 percent of what he makes annually. Students will also be eligible to have their loans forgiven after 20 years if they managed to make the payments when they were needed. The 20 year limit will be for undergraduates while graduates will be forgiven after 25 years.
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