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Obama's latest higher education plan seeks to ease students' loan burden

A complicated loan system has roiled students for years — and in his latest higher education proposal, President Barack Obama says he's hoping to simplify the process of taking out and repaying loans.

Obama is touting the plan as a "Student Aid Bill of Rights," and it includes simplifying the student loan system, as well as lowering the price and shortening the longevity of student loans.

“It says that every student deserves access to a quality, affordable education,” Obama said in remarks on Saturday.

The executive action would require students with loans to pay to 10 percent of their future income annually — a decrease from the current rate, which is 15 percent. Obama's proposal would also shorten the length of time during which students have to make loan payments. He'd like to forgive any remaining debt after 20 years, or 10 years for students working in the public sector.

Kristin Anthony, assistant director of federal direct loan programs at UNC, said she supports Obama's effort to ease the loan burden.

“(Obama is) trying to get it to a point where it would be much easier for students once they graduate,” she said. “They still have too many avenues by which students are finding out more information about loans. Once they narrow that even further, I think that they’ll have a lot of success with what he’s suggesting."

Natalia Abrams, executive director of the Student Debt Crisis, agrees the Obama administration made a good decision.

“I think this is just a framework, that we’re going to see more of this in the next few months and the year to come,” she said. “We’re also seeing this as a push to legislators to take action."

“I think we need to go further, but I think that this is a step in the right direction."

The current process for students dealing with loans is difficult to navigate, Anthony said.

“There are a lot of different websites for students to look at. We require students who borrow to go through exit loan counseling, which they do on an entirely different website when they are learning about repayment,” she said. “If a student were enrolled prior to 2010, it's very possible that they have two servicers, lenders, reaching out to them six months before graduation."

Obama’s action follows years of tuition increases for students nationwide, including at UNC. The number of UNC undergraduate students with loans is 31 percent. The default rate on student loans increased to 2.3 percent in 2011 from 0.7 percent in 2009.

Ian Nickel, a UNC senior with student loans, was unsure the petition would affect him.

“It depends when (the loans) would kick in, for me at least, as someone going to medical school,” he said. “Coming out as a resident you would make not a lot of money, but it depends when those loans would be expected to be paid off.”

Savannah Waldrop, a junior who takes out loans, said she's been deterred from taking summer classes at UNC because she wouldn't be able to work in the summer — and instead would take out more loans.

“Student loans are kind of scary because they determine a lot. You aren’t guaranteed a job in the future, in this economy, so it’s just kind of scary,” she said.

Zachary Horner, an office assistant for Lee County Schools, has brought high school students on college tours — including a trip to UNC on Wednesday. He said he thinks colleges should publicly break down the actual cost of attendance, versus just tuition and fees.

“I think they probably could do a lot better of maybe guesstimating the other costs — like if you need to drive, how much is it going to cost for gas, and food expenses and other different expenses that maybe are, admittedly, going to be a little hard to figure out sometimes,” he said.

“Even just giving a guess for people to be aware of it’s not just tuition, it’s not just room and board, there are so many other things you have to be aware of."

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