President Obama has announced his “Pay As You Earn” plan, which reduces the burden of student loans by consolidating loans into a single government loan, with payments based on income with a cap at 10 percent and forgiving loans after 20 years instead of 25.

This plan will significantly aid graduates and future graduate students so that they won’t feel encumbered with financial debt. It’s no secret that the job market has become tough and will probably continue to worsen. There are many students left without jobs after graduating, but they are stuck with a huge debt to pay off.

By consolidating loans, students will only have one payment to make instead of multiples, which would greatly reduce the amount of bills. Also, students will be able to pay back loans easier, with payments adjusted to their personal income.

However, this system can be greatly abused.

Consolidating loans does ease the financial burden on students. And with a payment cap at 10 percent, it does make it easier for students to pay off the debt. However this doesn’t necessarily mean the debt will be paid off.

Students will be required to make payments based on how much they earn. So if a student secures a stable job or makes a decent amount of money, the loans would be paid off in a relatively fast amount of time. But that’s where the problem lies.

Inversely, if a student is unable to land a job or doesn’t make a decent amount of money, then the loans would take a longer time to be paid off. Also, the loans will be forgiven after 20 years. So in sense, a student can take out as many loans as possible without being obligated to pay the whole debt back.

This loophole has the damaging possibility of amplifying the current economic crisis. Being able to take loans without having to pay them back in full is a foolish notion. It is not unlikely that many students will take advantage of the loans, as they will probably see it as free money, just like the financial aid system. This will not help the economy but will only put it deeper into debt.

The “Pay As You Earn” plan does have potential, but needs some modifications. Consolidating loans into one will substantially help students pay their debts. However, the forgiving of the loans will either have to be adjusted or removed entirely to avoid any probable abuses that can further the economic crisis.