President Barack Obama announced plans last month to make federal student loans easier to manage, but local officials aren’t sure how much of an impact his initiatives will ultimately have.
“Unfortunately, some of the details are being lost in the buzz about Obama’s plan,” said Erin Klarer, vice president of government relations for the Kentucky Higher Education Assistance Authority.
In the 2009-2010 school year, 61.8 percent of undergraduates at Kentucky’s public universities had federal student loans, and their average undergraduate student loan debt was $20,882, Klarer said. At Western Kentucky University, the number of students with federal loans was 12,607 during the 2010-2011 academic year, according to Cindy Burnette, director of student financial assistance at WKU.
There are three main components to Obama’s plan, Burnette said.
One part is moving up the start date for a couple of changes to the Income-Based Repayment plan, she said.
People who have limited income and can’t afford their monthly loan payments could qualify for IBR, which currently caps repayment at 15 percent of their income and forgives the rest of their loan after 25 years, Burnette said.
In 2010, Congress voted to decrease the repayment amount to 10 percent for some people who qualify for IBR, as
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