President Obama has issued an executive order requiring student loan repayments be capped at 10 percent of a student borrower’s monthly income as part of the “Pay As You Earn” program.
“Under many of the plans, low-income borrowers can have their balance canceled after 25 years of on-time payments. The president’s plan moves the forgiveness date to 20 years or 10 years for those in public service jobs,” Fox News reports.
According to the American Enterprise Institute, here’s what’s wrong with Obama’s initiatives.
“1. Most families who use PLUS loans are not gaining access to institutions with high graduation rates.”
“2. Institutions are being rewarded for increasing tuition.”
“3. Parents are not using PLUS to finance the same educational experiences.”
“4. [The U.S. Department of Education] needs to collect and report better data on the PLUS Program.”
These changes just feed into the higher education bubble.
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