President Barack Obama’s recently announced student loan relief plan has Butler University students hoping for change—the kind that doesn’t involve an increase in tuition prices and loan interest rates.
More than 80 percent of Butler students receive financial aid, and each year the university awards more than $3.8 million to help meet this need. Even so, private tuition is rising, and sometimes student loans are needed to fill the gaps.
For most students, the fact that the president is making an effort at all is encouraging, although some disagree with the means.
“I believe Obama’s newly released plan to aid students with student loan packages will make a huge difference for those of us that struggle to go to a good university,” said junior psychology major Jessica Wlodarski. “I find it hard to believe the plan won’t better the lives of students that struggle to go to their university of choice.”
Junior secondary education major Shelbi Burnett said there is a delicate balance between making education affordable and attainable for everyone.
“I think we can all agree everyone should have a chance to seek higher education and, like it or not, in this economy affordability can influence that decision,” she said.
Sophomore MIS major Matt Ringle said the measure doesn’t go far enough.
“I see this as just another attempt to reform an education system that is way beyond repair,” Ringle said. “Obama should reconsider revamping the whole system instead of minor programs here and there.”
Employees at the financial aid office have been helping students understand their financial commitments after they graduate.
“We’re seeing and hearing from more students who, nearing graduation, are trying to understand their loans in multiple places and trying to keep track of them, but this consolidation will make things easier to manage,” said Melissa Smurdon, director of financial aid. “I definitely think it’s a positive thing. It offers very positive options for borrowers. It should help manage the debt.”
Vice President for Finance Bruce Arick said he sees things from a broader perspective.
“Nothing’s free—there’s always something to offset the other,” he said. “If you purely look at the borrower, these are good things. But I have to believe that there’s a counter that has to come into play. And it may be at a very high level.When it’s the government, they can do whatever they want. They print the money.”
Obama said the plan is a way of combating ballooning student debt, which has risen past $1 trillion—more than the nation’s credit card debt.
The plan, which Obama announced at the University of Colorado in Denver on Oct. 26, will be put into effect by executive order. It will consist of three primary components: a way for borrowers with direct government loans and government-backed private loans to consolidate their balances, a limit on the amount of student loan payments to 10 percent of a graduate’s income and a forgiveness of any debt still outstanding after 20 years.
The last two provisions of the plan move existing legislation up in the timeline. The current payback cap is 15 percent and forgiveness time 25 years, but both are set to decrease to 10 percent and 20 years in 2014, respectively.