White House announces student debt initiative - KTTC Rochester, Austin, Mason City News, Weather and Sports

White House announces student debt initiative

Photo: MGN Online Photo: MGN Online
(NBC) -

The student debt crisis is only getting worse and has prompted the White House to lay out yet another set of initiatives to tackle it.

A U.S. Government Accountability Office report found that by the end of March, nearly 8 million Americans had failed to make a monthly payment on their student loans. It's a default rate well-known on college campuses nationwide.

"I know a lot of people who have graduated are still paying them off, they graduated 10 years ago and they are still paying them off," said student Jessica Davis.

Student loan debt has nearly tripled to more than a trillion dollars in the last decade, causing a domino effect on life after graduation.

"I have over 30,000 in loans just looming there," said student Darius Bazemore.

"Everything from...it's preventing people from saving for a down payment for a home, it might delay marriage or having kids," said CNBC Consumer Reporter Kelli Grant.

Kelley Long from the American Institute of CPAs said, "It's having an effect on our entire economy and the way we live our lives because we're overwhelmed with this debt right out of school."

The Student Aid Bill of Rights that President Obama signed a year ago that lets students pay less when they earn less, and more as they earn more, was supposed to help. But the GAO found 70 percent of those in default qualify for it, but don't know about it.

"It bothers me that I am going to have student debt, but there is nothing I can do about it," said student Dessie Greene.

So, the White House announced Thursday it's putting pressure on firms that service student loans and getting the Consumer Financial Protection Bureau involved with the "payback playbook" that borrowers can access and loan services will be required to include in monthly bills. It's another step to prevent another debt bubble from bursting.

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