Last tuesday, U.S. President-Barack Obama had announced his plans to forgive federal students loans in his country.
In a speech in Scranton, PA the U.S president while addressing an assembled crowd said that it was not right to hold graduates to forcibly continue their graduation just because of the loan payment promises they had made and described his vision to end student loans by the end of last year.
“Just because someone borrowed a bunch of money doesn’t mean they have to pay it back,” he said while addressing students at Scranton University. “This isn’t 19th century England. This is America. And in America we’ve always believed in second chances.
“In today’s economy a university education is more important than ever. Where would successful people like Bill Gates, Steve Jobs, Tom Hanks, Brad Pitt or Mark Zuckerberg be without their college diplomas? These days skipping college just isn’t an option, but neither is continuing to pay for increasingly expensive tuition.
“We need colleges to teach our young people useful skills like sociology, gender studies and postmodern Moldovan literary analysis. But the most important thing we need to teach them is responsibility. And what better way to teach responsibility than to hold these banks accountable for the terrible loans they’ve made.”
Nor a Lender Be
Since 1980, the cost of education in America has ballooned up by nearly 600%. The student loan burden sums up to near $1 trillion, wherein most of lies in federal governments hands. The total no of student loan borrowers is estimated to be near 40 million having an average $24000 debt between them.
Even after the financial crisis, the debt of student loan has been increasing alarmingly and some economists have called this a crisis, as huge loan burdens discourage housing sales among young students.
This plan from the president will curb nearly $900 billion worth loan burden on students and this act was made effective since Nov 1 last year. This is going to put a considerable dent in the financial strength of the nation, but the president believes it will wipe out over several years.