President Obama's Loan Forgiveness

According to the latest report by Associated Press, The Obama Administration has proposed an educational loan forgiveness law which will take effect in 2014. The law will allow loans to be approved and granted directly from the government, which will be the primary lender.

Furthermore, students may not have to go through private lenders any more. As no "middle men" will be involved, there is a great chance for students to get more money and in an effective and efficient way.

According to the report, changes will improve repayment plans which would adjust loan payments from 15 percent to 10 percent of a student's disposable income, forgive remaining debt after 20 years instead of 25 and adjust the repayment length for public servants to 10 years, as long as regular payments are made on time.

Low income students will also get more help than before through increases in the federal Pell Grant, which will increase maximum amounts from $5,350 to $5,550 this year and $5,975 in 2017. The income levels required to be eligible for Pell money are also expected to increase, opening up grant opportunities to students whose families' incomes traditionally disqualified them.

Current graduating students can qualify for income-based repayment options of federal student loans, allowing students to repay according to their income.

The repayment is also relaxed for students with public service, teaching or governmental jobs as they could pay off a percentage of their student loan debt for each year of service, and for students with non-public service jobs, there is also loan forgiveness after a set period of time.