HEMPSTEAD, N.Y. (CBSNewYork) — Earlier Wednesday, President Barack Obama revealed his plan to consolidate and forgive student loans, a hot topic among young voters.
CBS 2’s Jennifer McLogan later met with cash-strapped college students, who were excited, but not exactly doing cartwheels.
Farhan Husain is a 21-year-old Hofstra University senior from Floral Park, N.Y., with multiple student loans.
“The thing that’s really scaring me … I’m trying not to look forward to … is the $80,000 in debt as soon as I step foot into the real world,” Husain said.
McLogan joined Husain and an impassioned room full of student borrowers Wednesday afternoon to get their take on President Obama’s new plan for easing their debt.
“Over the past three decades the cost of college has nearly tripled, and that is forcing you, forcing students to take out more loans and rack up more debt,” Obama said.
Outside of mortgages, student loans are the top source of household debt. As many as 30,000 petitioners recently went onto the White House website begging for student loan relief.
And they are going to get it.
The “pay as you earn” plan will reduce graduates repayment from 15 to 10 percent of discretionary income — for 20 years instead of 25 — and consolidate major federal loans into one while dropping interest rates one-half of a percentage point.
“So by the time I’m 42, my loans should be cleared up. It doesn’t sound too great,” Husain said. “It’s always going to be in my head that my family has to be worried about me and I don’t want that thought after I graduate. I’m supposed to be on my own.”
Hofstra professor Madeline Seifer said anxieties over debts are rising, as fewer students get immediate jobs and many are forced to move back home with their parents.
“One of the ways we can reverse this trend of hopelessness and helplessness is to have the financial burdens reduced somewhat,” Seifer said.
“It’s definitely a step in the right direction. I hope that we continue it,” Husain said.
Students told McLogan they’d like more help, but the current plan is promising.
The White House said the changes will carry no additional cost to taxpayers, and should not cut jobs of lenders. It also said the student loan relief could affect 23 million families and save some hundreds of dollars a month.
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