Photo: Daniel Goodman / Business Insider
Last week, Obama proposed his new “Pay As You Earn” plan to help relieve student debt.The proposal would cap a person’s payments at 10 per cent of their income and begin to take effect in 2012.
The Consumer Financial Protection Bureau is also creating “Know Before You Go,” a tool for students to compare different loans that are available.
But the truth is, would these really be able to help fix the growing student loan problem?
There is always the idea to forgive all student loans, but that seems both impractical and unfair.
But among them, less than 450,000 even try to take advantage of the government's current income-based repayment program.
This is a big reason why Obama's plan may have very little effect; it improves a plan that few even know exists.
Source: White House
62 per cent of public university students finish with debt.
72 per cent of private non-profit school students finish with debt.
96 per cent of private for-profit students finish with debt.
Source: The Project on Student Debt
26 per cent of student loan borrowers who started repayment in 2005 have become delinquent on their loans
Private loans have high interest rates and few to no repayment options or protections that come with federal loans. 81% of students with more than $40,000 in debt have private student loans.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.