FOREST CITY, IA - It's the second largest burden of debt in America: student loans.
The average student carries about $24,000 in loan debt, with about 10 percent of borrowers defaulting on the loan in the first two years after graduation, but President Obama is offering some assistance.
While students on college campuses across the country prepare for their futures, many of them are carrying unbelievable amounts of student loan debt. The President says he wants to help students pay the money back, but some think the plan falls short.
“Every year so far,” said Kyle Hoover, college junior.
Hoover is studying fire science administration at Waldorf and is already working to pay off debt.
“I work two jobs and then I work a job here at the school too to try to help out, not with money, but try to plan ahead and pay some off while I’m in college,” said Hoover.
While his situation might sound drastic he considers himself lucky because he knows people in worse situations.
“I have friends that go to colleges that have to take out $25-30,000 worth of loans and some of their majors are $30,000 dollar a year jobs,” said Hoover.
Hoover was excited to hear President Obama's plan would lower his monthly loan payment and even help forgive some of his debt altogether, but some think the plan needs work.
“When you examine the details it falls short of what it's intended to do and that's helping people,” said Dr. Eric Shoars, political analyst.
Shoars says the plan essentially only includes current college students and won't save much money in the long run.
“You can make it easier to repay the loan but if the people don't have any income coming in it's still a moot point,” said Shoars.
Shoars says where the President succeeds is his requirement of loan counseling.
“Students will understand exactly what they're getting themselves into what the price of their loan is when you factor interest and repayment over time,” said Soars.
More financial education is something Shoars thinks is needed across the board, so students like Hoover don't start out life in the hole.
“The knowledge you learn here the friends you make the people you meet those can help you find jobs and better yourself after you graduate,” said Hoover.
Because Hoover is majoring in a public service field President Obama's new plan would allow some of his federal loan to be forgiven, but the money to repay the loan still needs to come from somewhere.
Dr. Shoars says the burden would shift from the student to the taxpayer, which could cause other problems.
One reason student loan amounts are going up is because tuition is going up. The College Board reports average in-state tuition and fees at four-year public schools rose about eight percent this year. That's a new all-time high.
