Many of these loans are through the federal government. Right now, student loan debt in the United States exceeds one-trillion dollars, in part, because some loans aren't being paid back, but government leaders are working on ways to bring that debt down.
"Here's the problem," said President Obama."At a time when higher education has never been more important, it's also never been more expensive."
And that's why the president has signed an executive order that will extend the pay as you earn repayment plan to roughly five-million people. Anyone who got a federal student loan before October first 2007 will be eligible to apply for this payment option. If you apply and are accepted into the program, your payment could be no higher than ten-percent of your monthly income.
"We currently have students defaulting and the numbers are increasingly getting larger as students are borrowing more," said LCSC Financial Aid Director, Laura Hughes.
Student loans for college seniors average $29,400, some of the largest debts for U.S. households; more than auto loans and credit cards, and second only to mortgages.
"Very few people don't know someone who doesn't have a student loan, or they've had a student loan," said Hughes. "And, even if you've repaid it you know what it's like to have that student loan."
Leaders from the Congressional Budget Office said the president's plan could cost the country between ten and 12-billion dollars. Hughes said it's important that we figure out a way to help people who are struggling to pay back their loans because they're going to keep struggling whether we do or not. But, she said this isn't the only option nor is it the quickest fix.
"If individuals are looking for a solution to their problems right now, they need to be looking at programs that are currently available to see if any of them can help them until they apply for these new incentives," said Hughes.
Also, a bill that came up for a vote in the senate on Wednesday was shot down. The bill sought to fund the reduction in borrowers' student loan payments by increasing taxes on wealthy households. The bill received a 56-38 vote. It needs 60 yes-votes to pass. However, Hughes said she believes it may be revised and revisited because student loan debt is a huge problem right now.
For people who qualify for this payment plan, it wont be available until the end of 2015.