Not Waiting for Congress, President Obama Offers Relief To Student Loan Borrowers

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October 26, 2011

WASHINGTON— President Barack Obama is taking steps to ease the burden of student loans, potentially helping millions of cash-strapped college graduates in a tough economy.

Obama plans to accelerate a plan to cap student loan payments at 10 percent of income, bringing it forward to start in 2012 instead of 2014.

The loans initiative will be the third such move by Obama in as many days, following action to aid homeowners and boost hiring of military veterans. The White House wants to show he is an activist president battling a "do-nothing" Congress.

The loan changes do not require approval by Congress . . .

read more: http://www.chicagotribune.com/news/chi-obama-student-loans-20111026,0,5531471.story


(AP) WASHINGTON - The White House said Mr. Obama will use his executive authority to provide student loan relief in two ways.

First, he will accelerate a measure passed by Congress that reduces the maximum repayment on student loans from 15 percent of discretionary income annually to 10 percent. The White House wants it to go into effect in 2012, instead of 2014. In addition, the White House says the remaining debt would be forgiven after 20 years, instead of 25. About 1.6 million borrowers could be affected.

Second, he will allow borrowers who have a loan from the Federal Family Education Loan Program and a direct loan from the government to consolidate them into one loan. The consolidated loan would carry an interest rate of up to a half percentage point less than before. This could affect 5.8 million more borrowers.

Education Secretary Arne Duncan told reporters on a conference call that the changes could save some borrowers hundreds of dollars a month.

read more: http://www.cbsnews.com/8301-250_162-20125577/obama-to-outline-student-loan-relief-plan/


“In a global economy, putting a college education within reach for every American has never been more important… But it’s also never been more expensive,” President Obama said in a statement. “That’s why today we’re taking steps to help nearly 1.6 million Americans lower their monthly student loan payments.”

Currently, the Income Based Repayment program, introduced in 2007, limits monthly debt payments to 15 percent of their discretionary income. The new proposal will cap debt payments at 10 percent starting 2012.

Under the “Pay as You Earn” program, students’ debt will be canceled after 20 years, as opposed to 25 years under the IBR.

“Steps like these won’t take the place of the bold action we need from Congress to boost our economy and create jobs, but they will make a difference. And until Congress does act, I will continue to do everything in my power to act on behalf of the American people,” Obama added in the statement.

read more: http://thedp.com/index.php/article/2011/10/new_obama_plan_will_help_students_manage_loans


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