Say what you will about President Obama but, at least in this case, he recognizes a true crisis when he sees one. Student loan debt is at its highest level ever and the delinquency rate is higher than that of credit cards. So when people call the student loan debt problem a “crisis” they’re not exaggerating. By nearly any measure college graduates are facing one of the toughest employment cycles ever and have more indebtedness to combat due to the rising cost of college.
As part of his “We Can’t Wait” unilateral stimulus effort President Obama has issued an executive order that aims to help debtors and in turn stimulate the economy. Obama’s intentions are good but is his new plan enough? BE Next examines it’s nuances.
Sorry, it’s not retroactive
First thing to note: It does absolutely nothing to help current borrowers making payments or, worse, those in default and who arguably need the most help. Only borrowers who take out loans in 2012 and going forward will be eligible. So that means no recent 2011 graduates; no one currently making payments now, especially those who are in default on their loan payments, will be able to take advantage of this program.