Christina Montana is one of many college graduates who is in debt from her undergraduate degree.
Even with a job and scholarships, the 22-year-old UF English alumna has about $34,000 worth of loan debt. Once she started looking at the repayment plans for loans, she started getting nervous about paying them back.
However, the Obama administration is expanding the “Pay As You Earn” plan, which will cap student loan payments at 10 percent of graduates’ income. The hope is to encourage students to pursue higher education and make it more affordable.
The goal is to make this program available by Dec. 31, 2015.
Rick Wilder, director of student financial affairs at UF, said this program will be available to students who graduated after 2007 and will only affect students once they graduate.
About 20 million Americans attend college each year, and about 60 percent of college attendees borrow money to cover the costs annually, according to American Student Assistance.
UF is already playing a big role to help students financially and economically with borrowing and repaying loans, Wilder said.
UF graduates’ average debt is $21,700, which is $9,000 less than the national average, he said.
In 2013, roughly 19,000 students at UF took out loans for their education, totalling about $260 million worth of loans, he said.
“UF is actively engaging with student borrowers, not only to be responsible with money,” Wilder said, “but to encourage students to borrow what they must have to cover education costs.”
About 37 million people in the U.S. today have outstanding college loans, according to ASA.
The Obama administration will collaborate with students and families to make sure they have the best repayment information available.
“This is a country where opportunity should be available for anybody — the idea that no matter who you are, what you look like, where you come from, how you were raised, who you love, if you’re willing to work hard, if you’re willing to live up to your responsibilities, you can make it here in America,” President Obama said in a recent speech.
Montana would like to go to graduate school next year to study creative writing, and with this loan repayment plan, graduate school will be more affordable.
“Even if it’s only 10 percent,” she said, “it makes a huge difference.”
[A version of this story ran on pages 1-4 on 6/17/2014 under the headline "Obama seeks to expand loan repayment plan "]
