President Obama Unveils Plan That Will Reduce, Consolidate Student Loans

Taking the opposite course of action from Republican Presidential candidate Ron Paul, President Obama has created a plan that would allow students to lower and consolidate their student loans.
 
The plan, which comes on the heels of a recent report by the College Board that says the average in-state tuition and fees at public colleges rose 8.3 percent compared to last year, aims to reduce student loan debt in two ways.

First, Obama plans to accelerate a measure already passed by Congress that would reduce the maximum repayment on student loans from 15 percent of discretionary income to 10 percent. Originally slated to go into effect in 2014, Obama now wants to push the measure to take effect in 2012. 
 
Second, Obama will allow borrowers who have a direct government loan and a loan from the Federal Family Education Loan Program to consolidate the two into one loan. This initiative could affect up to as many as 5.8 million borrowers.
 
In addition to the two-part plan, White House Officials say that any remaining debt would be forgiven after 20 years, instead of 25.  The plan would not carry any additional charges to taxpayers and could save borrowers hundreds of dollars per month.
 
Keeping in mind that outside of mortgages, student loans are the No. 1 source of household debt in America, this new plan may play an important factor in the upcoming 2012 presidential election. A huge demographic of Obama’s supporters are, in fact, young voters who played an important part in his 2008 presidential campaign.