President Obama has created a new program called “We Can’t Wait” to help youth manage their student debt and enable them to start their own business upon graduation.
The program is said to modify the federal government’s “income-based repayment” plan, allowing qualifying students to pay back loans using a monthly percentage of their discretionary income, rather than a flat monthly payment.
Currently, students are eligible to cap their loan payments at 15 percent of their discretionary income, but the new proposal calls to lower that number to 10 percent. The plan intends to also forgive the balance of eligible student’s debt after 20 years of payments, as opposed to 25 years, which is what the current law allows.
President Obama believes that reducing cost after graduation will leave students with possibly enough money to start their own business. Many students are discouraged from building a startup simply because they don’t have the finances right after school to do so.
Loans can be very discouraging, to many, it is easier to try and find a job then continuing to put out money to create your own. This program is set to launch Jan. 1. Hard to say whether the initiative will actually be successful in pushing more students to be entrepreneurs, but it can only help, not hinder.