Obama Signs Executive Order For Student Loan Relief - News and Weather For The Quad Cities -

Obama Signs Executive Order For Student Loan Relief

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President Obama signed executive orders today offering relief to student loan borrowers. The plan would allow about five million students who took out federal direct loans.  The measure caps their payments at 10 percent on their monthly income.  Essentially, the move is an expansion of a 2010 law, which allows most students taking out loans today to enjoy the 10 percent cap. This expansion extends to former students with loans taken out before October 2007 or who had stopped borrowing by October 2011.

"It is my highest bill of everything that I have," said college graduate, Brandy Donaldson.  

Donaldsen graduated from from college with her Bachelor's degree in 2005.  She says nearly 10 years later, she's still paying her debts off, but it's costing her more than she had ever imagined.

"Student loans have been a stress. Just to put it into perspective, for getting a Bachelor and Master degrees, my student loan payments right now are more than my mortgage payment so its kind of stressful thing," said Donaldsen.  

She says she has over $50,000 left to pay off and the executive order would help relieve  tress from the  monthly payments a great deal.

"If this initiative caps it at 10 percent of your monthly income, that would be phenomenal because no matter how much your income grows, it would still stay at that 10 percent level and that would be great," said Donaldsen.  

But Bob Andersen with the Western Illinois University financial aid office says former students like Donaldsen shouldn't get too excited.  

"Because they are paying less, they still have the same debt. They will just have to pay longer. The interest rate is still there and it keeps adding up," said Andersen.  

He's even calling on Congress to do something about the long term effects of student debt.

"It does not help student debt, per se.  What they need to do is increase grant assistance so students don't have to take out so much in loans," said Andersen.  

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