Obama moves to extend student loan payment relief

"We are here today because we believe that in America, no hard-working young person should be priced out of a higher education"
Associated Press
Jun 10, 2014

Aiming to alleviate the burden of student loan debt, President Barack Obama expanded a program Monday that lets borrowers pay no more than 10 percent of their income every month, and threw his support behind more sweeping Senate legislation targeting the issue.

Flanked by student loan borrowers at the White House, Obama said the rising costs of college have left America's middle class feeling trapped. He put his pen to a presidential memorandum that he said could help an additional 5 million borrowers lower their monthly payments.

"I'm only here because this country gave me a chance through education," Obama said. "We are here today because we believe that in America, no hard-working young person should be priced out of a higher education."

An existing repayment plan Obama announced in 2010 lets borrowers pay no more than 10 percent of their monthly income in payments, but is only available for those who started borrowing after October 2007. Obama's memo expands that program by making opening it to those who borrowed anytime in the past.

Obama also announced he is directing the government to renegotiate contracts with federal student loan servicers to encourage them to make it easier for borrowers to avoid defaulting on their loans. And he asked Treasury and Education departments to work with major tax preparers, including H&R Block and the makers of TurboTax, to increase awareness about tuition tax credits and flexible repayment options available to borrowers.

"It's going to make progress, but not enough," Obama said. "We need more."

To that end, Obama used the East Room appearance to endorse legislation that would let college graduates with heavy debts refinance their loans.

The bill's chief advocate, Democratic Sen. Elizabeth Warren of Massachusetts, joined a half-dozen other Democratic lawmakers as Obama urged Congress to pass the bill.

"This should be a no-brainer," Obama said.

The Senate is expected to debate the legislation next week, but it faces significant opposition from Republicans, who disagree with the Democrats' plan for how to pay for it.

The dual strategy — taking executive action while urging Congress to finish the job — has become Obama's signature playbook this year. Stymied by gridlock as Congress marches toward the midterm elections, he has repeatedly sought ways to go around Congress with modest steps.

Under an income-based repayment plan created by Congress, the maximum monthly payment is already set to drop from 15 percent of income to 10 percent in July 2014. But that plan only affects new borrowers. Obama's "Pay as You Earn" plan uses another part of existing law to offer similar benefits to people who already borrowed to finance their education.

In previous Obama budgets, the White House has predicted that making the plan retroactive would cost the federal government billions of dollars in the early years. Asked about the costs Monday, Education Secretary Arne Duncan said the administration won't know how much it will cost until they go through the rule-making process to put the expansion in place.

"We actually don't know the costs yet," Duncan said. "We'll figure that out on the back end."

Republican leaders in Congress have faulted Obama's steps on loan repayments for failing to address the root cause: college costs that are too high.

"This was not a thought-out policy solution, but another in a series of political events designed to distract from the difficulties facing college grads in the Obama economy," said Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, R-Ky.

Comments

From the Grave

It should be free.

MiddleRight

Classic Obama. We have a real problem in that it is way to expensive to get a college education.
Instead of doing something to lower the cost and make it more affordable, he tries to minimize payments, which you will only lengthen the amount of time it takes to repay the debt.
I've read that this will save on average about $1 per month.

Maybe if college students were military deserters, he'd offer the world for them.

freethinker1

You actually think a President can tell a college/university what they can charge for tuition?

MiddleRight

He's pretty much doing anything he wants right now.

And no, I don't think he can. However, his solution is laughable and only extends the student loan debt problem. Much like our national debt problem.

What he could do is implement policies to help the economy create jobs.

grumpy

"It should be free."

Yes it is much more better for the gov't pay for it so the people don't have to... Oh wait.... where is it that the gov't gets it's money from again?

From the Grave

And then, when you get your job and start paying taxes, you will be charged a nominal amount as a "repayment" based on your actual income. Nobody should pass on further education because they can't afford it. Nobody.

meowmix

Totally agree. Better to see a kid go to college free of charge and become a productive tax-paying citizen than a drop-out living hand-to-mouth courtesy of the those of us who pay taxes. I just don't get the resentment of people begrudging anyone trying for a better life.

There you go again

How about some focus on "Job Creation" so graduates can get jobs, rather than more concessions?!?! Once again, I see the Prsident avoiding the obvious (no job growth-just people leaving the work force). As a recent graduate, I can honestly say I more relived to have a job so I can repay my school loans instead of relying on government assistance to delay loan payment.

freethinker1

Dude, you are stunningly misinformed. More than 9 million jobs have been added under Obama, outpacing the 7 million jobs lost under Bush. It's unfortunate that Republican Congressmen oppose every single Obama jobs creation initiative, isn't it? They and predatory college loan companies are the problem.

Donegan

Predatory loan companies?
http://www.usatoday.com/story/ne...
Who is the predator now?

MiddleRight

I don't think "Closedmindedthinker1" will be responding to this as it doesn't fit his narrative.

Prime rate is at 3.25% and the bank fed funds rate is like .25%. Why are students repaying the gov't 6-10%???????
The only way out of a student loan is to die, so they aren't high risk.

Also, I think only the first $2,000 in student loan interest is deductible on your federal taxes. Shouldn't this be a straight credit instead of a deduction with no limit?

See "Freethinker1" there are two great ideas to help students repay loans. The Chosen One is too busy releasing the worst human beings on the planet from captivity to worry about solutions to Americans problems though.

coasterfan

I agree with Freethinker, but think you have some good ideas, too. The point is: Obama is the first president to attempt to tackle this issue, and he deserves some snaps for that. He also has worked to increase funding for student loans and grants. It's put more $$ in middle-class pockets, which isn't a bad thing. Romney, as you recall, wanted to do the exact opposite.

Re: releasing Gitmo prisoners, let me provide some perspective. Bush released more than 500 Guantanamo Bay prisoners (that's not a misprint: five hundred)_and in return, zero (that's not a misprint: 0) American captives were freed.

Obama did receive a majority of the popular vote in 2012 and won a landslide Electoral College victory. So, you're right, he was the chosen one.

dontknowmuch

By your math then the unemployment rate should be lower than it was under Bush. Before blaming the GOP as you are sheeple dude tell us how many jobs bills are languishing on Harry Reid's desk

From the Grave

Some people's monthly payments are so high though, that they can't even afford live on their own.

Contango

Re: "can't even afford live on their own,"

Approx. 1/3 of adult "children" now live with their parents.

Mom and Dad are moving in too.

Boomers: The "Sandwich Generation."

Contango

I heard a figure last night: 69% of students don't graduate.

Many flunk out after partying hearty, leave, but are still responsible for the debt.

Pres. Obama needs to contact Fed Chair Yellen and tell her to print up a few trillion dollars, pass it over to the Treasury Dept. so they can ship it out to these poor unfortunate souls.

Darwin's choice

That seems to be the answer for most of this administrations failures...!

obama/failing

freethinker1

Apparently a majority of Americans disagree, otherwise he wouldn't have been re-elected.

freespeech1

He was re-elected cause the vast majority of voters are idiots! And how anyone can defend this liar is beyond me. If this would have been a Republican that has done what obie the weak has done they would have wanted his head on a platter. This guy couldn't lead his way out of a wet paper bag.

Contango

"The Presidency tends, year by year, to go to such men.

As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal.

On some great and glorious day the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron."

- H. L. Mencken, July 26, 1920

Contango

Re: "majority of Americans,"

Obama phone lady spoke volumes for those masses.

http://www.youtube.com/watch?v=t...

ladydye_5

And many flunk out, after using all the college debt to party WITH. Buying pizza, beer, clothes, cars, everything BUT the education they NEED.

coasterfan

I think Contango meant party "hearty", as is "with gusto", rather than "hardy", which has a completely different meaning.

The Hero Zone's picture
The Hero Zone

"We actually don't know the costs yet," Duncan said. "We'll figure that out on the back end." Huh I guess no brains were actually used as President Obama had predicted.

Not thinking about future costs, ripple effects, or anything else beyond a convenient tagline? Seems par for the course. Not involving Congress on a plan that even the White House says would cost BILLIONS of dollars its first year?

#seemslegit

NBC's Chuck Todd Grills Obama Admin On Constitutionality Of Education Plan
http://www.youtube.com/watch?v=D...

Obama Admin: We "Don't Know The Cost Yet" Of Our Own Education Plan
http://www.youtube.com/watch?v=W...
Listen to this stammering non-response. "...rather than paying back loans...". Aren't those loans tax money? Correct me if I'm wrong.

Hello? Hello? Anyone there in D.C. would like to, you know, do something other than give a babbling, petty retort like the unfortunately-presumed-to-be-reelected-Senator-McConnell (by proxy of a spokesman since I guess he can't be bothered to do it himself)?

If it weren't a sick joke to begin with this is where I'd conclude by saying, "We call this act...THE ARISTOCRATS!"

http://en.wikipedia.org/wiki/The...

Donegan

When they can monetize the debt at will the currency becomes worthless. Those in Washington see that they can spend all they want for taglines and election fodder while the uneducated masses think it is "Free".
“The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.”
― Alexis de Tocqueville
The only difference is the executive is overstepping its bounds to spend before congress even gets a chance to.

Contango

Re: "When they can monetize the debt at will the currency becomes worthless."

“There is no STANDARD of money that has simply EVER lasted. Everything has risen, crashed, and burned – WITHOUT EXCEPTION.”

- Martin Armstrong

Countries regularly have and do cancel legal tender (notes) rendering them worthless. The U.S. 'currently' is the exception.

Donegan

https://uk.news.yahoo.com/russia...
The demise of the dollar is being rushed through this admin. The rest of the world sees it already but the leftist voters here either do not care or are actively working towards that goal.

Contango

Re: "The demise of the dollar,"

I believe that Warren Buffett called it right:

"Buffett Calls Fed History’s Greatest Hedge Fund"

http://www.bloomberg.com/news/20...

Hedge funds never go bust do they? :)

coasterfan

Actually, we Leftists simply don't believe anything that Republicans have to say with regards to the budget/deficit. Mostly because their economic policies have continually been wrong over the past 40 years.

A simple glance at history shows that the deficit has grown under every Republican president since 1980, and has shrunk under every single Democratic president since 1980.

You're going to lecture us, after presiding over the worst American recession in 90 years? The party hasn't changed their stance since 2008, yet we're supposed to believe those same policies are the answer? No thanks. I've seen that bag of poo, and I don't want it.

Darwin's choice

...National debt, 17.88 trillion dollars, almost doubled under obama's failures....! There is something for your "pride" of the failure!

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