FORT WAYNE, Ind. (WANE) – President Obama has signed a presidential memorandum to help bring down your student loan payments. He’s asking the Secretary of Education to propose new rules that would let almost 5 million student loan borrowers cap their payments.
Under the current law that went into effect in 2010, capping student loan payments only applied to graduates who borrowed from October 2007. President Obama is urging Congress to extend that program to all graduates with student loans.
The current plan is to have student’s pay back 10 percent of their monthly income on their loans. If students get a job in the public sector and pay their student loans on time for 10 years, the remaining balance will be forgiven.
“It’s definitely hard, it’s not anything simple. But you kind of make due,” said Cassey Hurtado, a recent graduate of University of Saint Francis in Fort Wayne.
Hurtado is the communication coordinator for her alma mater. She said she relied on student loans to make up the rest of her tuition that grants and scholarships didn’t cover.
David Peterson, director of financial at IPFW, said he runs into students who don’t keep track of how much money they take out in loans. He encourages parents and students to keep track of how much they take out while in school.
“They graduate and many are pretty significantly shocked when they get their first notification about it telling them you’re first monthly payment is going to be $500, $400 dollars a month and they weren’t expecting it to be so high,” he said. “The first thing they need to do is realize how much their loan debt is”
President Obama is also throwing his support behind more sweeping Senate legislation targeting this issue.
Experts said 71 percent of college seniors took out a student loan last year.