President Obama's student loan "reform" is well-intentioned but highly inefficient and problematic.
Allowing repayment in small amounts based on income, with forgiveness after 25 years, makes the interest grow faster than it can be repaid, and the forgiven amount at the end is taxable. When 90-100% of each payment only covers the monthly interest and you know you'll never be able to repay the entire loan, it takes away all incentives to make more than minimum payments.
Instead, the government should cancel the interest on loans, and allow students to repay the entire principal without forgiveness. That way, students will be able to repay, will have incentive to make large payments, and the government will make receive more actual full repayments.