“I’ve heard from too many young people who are frustrated that they’ve done everything they were supposed to do—and now they’re paying the price.”
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Today, the Obama Administration announced it is taking further steps to increase college affordability by making it easier to manage student loan debt. The announcement is part of several executive actions and specifically, a Presidential Memorandum, which will expand on the “Pay As You Earn” student debt relief program which was only available to Federal student loan borrowers who had accepted loans after October 2007.
“I’ve heard from too many young people who are frustrated that they’ve done everything they were supposed to do — and now they’re paying the price,” Obama said yesterday in his weekly address.
The original “Pay As You Earn” proposal affected the preexisting Income-Based Repayment Plan by reducing monthly payments for more than one and a half million current college students and forgiving the balance of debt after 20 years of payments. This expansion will now include and additional 5 million people who took out loans before October 2007 or haven’t borrowed since 2011.
Coordinating with legislation pushed by Senate Democrats, President Obama directed the Department of Education to expand the number of people who can take advantage of a law capping payments on federal direct loans to no more than 10 percent of monthly incomes. “I’m only here because this country gave me a chance through education,” Obama said. “We believe that in America, no hard-working young person should be priced out of a higher education.”
Following on the heels of last weeks announcement that President Obama will use his executive authority to cut carbon emissions by up to 30 percent, this marks the second time in two weeks that the President has used his executive power to advance policy past the bureaucratic gridlock on Capitol Hill.
Nationwide, outstanding student loan debt totals to more than $1.2 trillion, surpassing credit card or auto loan debt. The bill’s chief advocate, Democratic Sen. Elizabeth Warren of Massachusetts called student-loan debt levels “truly an emergency circumstance,” with more than 7 in 10 college seniors in 2012 graduating with some amount of student loan debt, and a survey from Black Book Market Research finding 94 percent of working college graduates since 2008 saying their student loan payments are “not manageable” at their current rate of pay.
Now it’s up to lawmakers to decide whether to “protect you from crushing debt, or protect tax breaks for millionaires” said President Obama, in response to backlash from the right. Republicans have opposed the proposal, which would be paid for through tax increases on wealthy individuals, and are likely to block its passage.
Watch Supporting America’s Students:
By Marcos Da Silva
This post originally appeared at Occupy Democrats. Reprinted with permission.
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Photo: AP