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Obama announces plan to lower student loan payments

Students study with their laptop computers in the Pedagogical Library at the Freie Universitaet university on September 20, 2011 in Berlin, Germany.

Kai Ryssdal: In his latest attempt to get something going on the economy, President Obama announced a plan today to lower student loan payments. To basically reduce the maximum possible payments and essentially forgive remaining debt after 20 years, instead of 25, as it is now.

An admittedly unscientific Marketplace in-house survey this morning made it clear there a lot of people still paying down their college or graduate school -- years after they got out.

We called around to get some other perspectives.

Colin Malone: My name's Colin Malone. I am from Portland, Maine. My monthly payment comes to around $620 a month. It's a substantial amount, especially if you take into account of rent and just cost of living. You know, it definitely holds me back in some areas; I'm renting an apartment right now with roommates. I don't drive a brand new car. As far as savings goes, that's been a tough thing the last couple of years, for sure.

Betsey Harvery: I'm Betsey Harvery, and I'm from New Brunswick, N.J. I have about $35,000 worth of loans, and I expect to start paying the loans off about six months after I graduate, so that'd be October or November 2012. I would estimate I would have to pay about $300 a month. Three hundred dollars a month is pretty significant, I think, especially for a starting salary.

Clifford Edwards: I'm Clifford Edwards from Houston, Texas. I'm 52. I do have student loans. Including interest, my balance is up to $93,000. I don't ever see me being able to pay that off -- I mean, that's more than a house costs. It's devastating, it's like this huge guillotine hanging over my head. You know, I haven't had a car in over a decade.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
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The previous commenters make excellent points regarding the personal responsibility of educational costs of undergraduate education. Graduate school as well, can be planned for, paid for (sometimes)and if you're good you can carefully budget for you expected salary upon exit and manage your loan payments. That's what I'm doing with the $40K I borrowed to finance a career change into engineering and a Master's degree. My payments will be almost as much as my rent, and I can deal with that.

But what about professional school? There are precious few scholarships for medical school, and tuition runs $15-40K per year. Best hope there's a medical school in your hometown, or you have a non-medical-student-and-has-a-good-job spouse, because that doesn't include any living expenses, or the high costs of applying to residency. We are terribly short on general practitioners in many areas of the country, but the high costs of medical education steer most of the best-and-brightest into more lucrative specialties so they can pay off their crushing debt.

Hey Clifford- At 52 and $98K, some questions beg to be asked? You didn't do any service an earn the right to a Montomery GI Bill? You didn't apply any other grants or scholarships? What school did you go to? What are you studying? What kind of payback did you expect when you graduated? Did you take the student loans to pay for something other than school? You have been around the block and should be thinking ahead. At least Betsy demonstrates an understanding what she committed herself to. Something tells me you didn't tell us everything. No sympathy from me!

Are we moving to a system where we can take loans, which need not be paid back without any negative consequence. It looks like it if I follow events in last few days. Looks like only suckers will pay back the loans. Even bigger are the suckers who don't take the loans at all and spend within their means.

Listening to the interviews from people, it defies my logic about the entitlement people think they have for free public money.

Even more amazing thing is cheerleading by media for these initiatives. May be world is transforming into bizzaro world.

I hope scientists can come up with some kind of gene transformation therapy, so that I can also become a irresponsible person. I can only hope!

Hey I bought a car and now I don't like the monthly payments. Can my loan be forgiven? Oh, same with my house and my credit card bills and etc.

How is it fair to the rest of us who pay for things we buy to have others' get it for free?

Oh, and Marketplace couldn't find at least one person to say that their student loan doesn't need to be forgiven because that was what they signed onto when they agreed to get their education and loans? Very suspect!

I was enraged when listening to this story.
My college experience: Working through college, sometimes dropping to part time student status so I could get a finance buffer for the following semester. That mixed with grants and scholarships helped me manage the bills. Additionally I shared an apartment with several folks - tight quarters indeed but we were all looking at the bigger pic - less cash owed upon completion. We shared food, books, a car, and bikes.
The school I attended was a quality big name school - one of my friends even sat out two years and worked full time. Ultimately he earned himself in-state student tuition in order to save costs.
We knew it was a temporary condition and the sacrifice would be worth it. Oh, and all of us graduated, all of us paid our loans off w/in five years.
So my question is: why on earth do people STILL feel they are saddled with high costs? It is not as if tuition costs are hidden from view and then one is surprised by the cost when graduating. You do not have to move out of your parents' home. You do not have to finish in four years. You do not have to live in the dorms your entire career. Argh, I'm steaming. Get a grip folks. Manage college expenses now - it is a good practice for the real world!!!

I think this concept removes any responsibility from the public. I have friends who have received loans and grants for years to extend their education because they are not interested in working and were confused about getting their hands dirty. Some are life-long students who live on borrowed money. I never finished my degree, and made the decision to spend my future college loan amount into revenue producing assets for my business that I has grown and remained diverse for the last 10 years. Would the bank forgive me after 20 years with this new concept? These students bought into the education system, borrowed money, and now it is time to pay it back.

Is Marketplace keeping track of cumulative tax payer cost for Obama's reelection campaign?

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