Several local college graduates said they have mixed feelings after President Barack Obama made an important announcement Monday regarding student loans.
Obama announced from the White House that he has signed an executive order to expand the eligibility of the Pay As You Earn program, which seeks to alleviate student loan debt by capping loan payments at 10 percent of the borrower’s monthly income.
By expanding the program to an older group of borrowers — those who took out loans before October 2007 — the opportunity will be extended to an additional 5 million student loan borrowers.
Although area graduates said the expansion of the plan could be helpful for some, they were skeptical, overall.
“I can see where it would benefit some people,” said Megan Fulkerson, of Oneonta. “If you really can’t make your bills each month, this could lower your payments so they’re more manageable. I just hope anyone who participates in the plan knows what they’re getting into and doesn’t go out and buy a car with their extra money.”
Fulkerson, who graduated from the State University College at Oneonta in 2012, said this is because she feels the plan will just prolong a student’s loan debt, drawing it out over many years.
“Even if I’m paying less each month, that will mean more interest in the long run,” Fulkerson said.
However, under the plan, if a student makes reliable payments, the balance of his or her loan will be forgiven after 20 years, or 10 years if the borrower works in public service, according to the White House.
Fulkerson appreciates the effort to try and alleviate student loan debt, she said. She and her husband have many friends who have loan payments that are greater than their home mortgages. It’s overwhelming, she said.
“When I graduated college and took out my first loan, I remember thinking it would be different — unlike a car loan or something of that sort — less ‘scammy,’” Fulkerson said. “But it has turned out to be very tricky and unclear, not at all straight forward. We feel that no matter how much or how little we pay each month, we won’t be able to get ahead.”