College students who pursue low-paying or public service jobs after graduation could see their burden of debt from student loans eased under a new proposal from the Obama administration. The plan also seeks to make provide more college assistance and ease the burden of repaying federal loans.
 
Under the proposal, which modifies legislation passed by Congress in 2007, students with federal loans would be required to repay no more than 10 percent of their income each year. Currently, 15 percent of a graduate’s income may go to loans.
 
Students who take low-paying jobs after graduating would also see their federal debts forgiven after 20 years. If a student takes a job in public service, like a teacher, police officer, or health-care provider, their loans will be forgiven after only ten.
 
“Students want careers, not just a job to pay the bills,” said Mark Kantrowitz, publisher of the financial aid website FinAid.org. “Working a public-service skill can often be more fulfilling than doing a job just to make money. If you give people a chance, with debt not standing in [their] way, you’re removing an impediment.”
 
President Obama’s plan also includes a tax credit of $10,000 for students who attend four years of college, and an increase in the number of Pell Grants given to low-income students.
 
The Congressional Budget Office estimates the initiative could save up the government up to $80 billion over the course of the next decade.


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