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© unknownU.S. Rep. Hansen Clarke, a Detroit Democrat, says student loans need more reforms than the bill signed Friday to keep interest rates from doubling.
President Barack Obama signed a law Friday extending a cap on federal Stafford student loan interest rates -- but U.S. Rep. Hansen Clarke, a Detroit Democrat, argues it doesn't go far enough.

He's hoping the more than 1 million people who have signed a petition supporting a bill he's championing will force Congress to make more meaningful reforms to the student loan system.

"The demand is to change the system," he said June 25. "We've got to keep the bubble from bursting and help people who are swamped by debt. I would like to forgive a lot of these loans."

Clarke's bill, which is in committee in the House, would do just that.

Under his plan, people could have federal loans forgiven if they paid 10% of their disposable income -- which is basically any income exceeding 150% of the federally set poverty level -- for 10 years. The plan would apply to undergraduate, graduate and parent loans. Those in public service jobs could have loans forgiven after five years.

"Nobody's getting a free ride here," he said. "They have to pay on the loan before they are eligible for forgiveness."

The bill would cap the total amount eligible for forgiveness at $45,000.

Clarke also would set up a program to allow some private loans to be converted to federal loans, making them eligible for those forgiveness standards.

If the bill passes, those who currently have student loans and have been making payments for 10 years would be eligible for forgiveness. Clarke's bill would keep the interest rate at 3.4% for federal loans indefinitely. The version signed by Obama keeps the cap, which expired July 1, for only the next year.

Tonya Markel, 28, graduated from Michigan State University six years ago and now works as a bank teller. She has been making payments on more than $40,000 of debt.

"It seems like I can't get out from under this," Markel of Detroit said. "There's a lot of people worse off than me that can pay some, but can't pay all this. I think this is a good idea."

During the bill signing in Washington late Friday afternoon, Obama said the interest rate cap is a good first step.

"(Higher education) can't be reserved for a privileged few," he said. "It's not enough to keep interest rates from doubling. I've asked Congress to (revamp) financial aid."

U.S. Rep Gary Peters, a Bloomfield Township Democrat, was a lead sponsor of the bill.

"We've still got a lot of work to do to make college more affordable, but preventing student loan interest rates from doubling is a step in the right direction," Peters said in a statement.