President Obama signed a plan called Pay as You Earn into action on June 9 to help students pay back their debt from school loans, according to the White House Office of the Press.
Pay as You Earn will limit student monthly loan payments to 10 percent of the borrower’s monthly income and extend the benefits to students who borrowed before 2007, according to the Atlanta Journal Constitution.
The average student loan debt for Georgia in 2012 was over $23,000, according to Atlanta Journal Constitution. This is lower than the national average of $29,400, however student debt affects 59 percent of the population in the state.
Grace Bondy, english major, said she believes students should be more informed of changes.
“With all of these new programs being signed, and with the student loan industry changing, my fear is that a lot of students aren’t going to be completely informed or aware of the changes, so they don’t exactly know what they’re getting into when they take out loans,” Bondy said.
Joel Rabanal, Masters student in business administration, said the new plan won’t help students without them being educated about the program.
“The problem is that hardly any of the borrowers are currently on that plan or even know it exists despite that this is the second time in a couple years that Obama has promoted it,” he said.
He also said the executive order isn’t going to solve all the problems with the education system costs, but make it so students know what they are getting into.
“The incentives for loan servicers will inevitably lead them to educate students better on their loans thus reducing their default rate, saving them money through consolidations and programs, and making sure that they understand how much they can handle,” he said.
During a live Q&A; session on June 10 regarding education and college affordability, Obama spoke about his plans for student debt and students being informed.
“We are working with universities to give students a sense of what [their] annual loans might be and what [their] financial aid will do and also what [their] monthly payment will be,” Obama said during the session.