In what education advocates are calling a modest first step toward addressing the increasing costs of higher education, President Obama announced yesterday that he will authorize changes in federal policy to make college loans more affordable and easier to repay, the Washington Post reports.
In recent weeks, the Occupy Wall Street movement has made student-loan relief one of its objectives, but the burden of education-related debt is nothing new to many college graduates. Students at the University of Colorado's Denver campus cheered yesterday as the president told the students that he and first lady Michelle Obama empathize with their plight.
"We were paying more on our student loans than we were paying on our mortgage each month," he said. "How do we make college more affordable, and how do we reduce your burden?"
The president outlined the "Know Before You Owe" plan (which would allow college graduates to limit federal student-loan repayments to 10 percent of discretionary income starting in January, two years before the cap was due to take effect under federal law) and the accelerated "pay as you earn" option (which could benefit up to 1.6 million low-income borrowers and reduce their payments by as much as a couple of hundred dollars a month, administration officials said).
All remaining debt on the federal loans would be forgiven after 20 years — five years earlier than under current law. To qualify, borrowers must have student loans in 2012 and have had loans in at least one of the previous four years.
In addition, nearly 6 million borrowers who have more than one federal student loan will be allowed to consolidate their debt, in some cases reducing their interest rates by up to half a percentage point, White House officials said.
The initiatives are part of the White House’s latest strategy — punctuated with the catchphrase "We can't wait" — aimed at pressuring Republicans to support provisions in the president's $447 billion American Jobs Act, which remains stalled in Congress.
College grads eager to take advantage of this plan should be glad the White House didn't hold off for that support, because it seems it could have been a long — or never-ending — wait. Republicans have denounced both Obama's decision to bypass them and the substance of the initiative. Rep. John Kline (R-Minn.), chairman of the House Committee on Education and the Workforce, says that the plan represents a decision by the president to "put politics before policy, touting a plan that will do nothing to help the nation's unemployed workers."
Read more at the Washington Post.
In other news: Police Critically Injure Iraq War Vet at OWS.