Obama Throws A Bone To Americans Crushed With Student Loans
College students and the rest of America’s youth voting bloc fell for candidate Barack Obama like a blind roofer in both 2008 and 2012.
Now, the president is throwing a bone to those millions of devotees by way of executive orders that will limit the percentage of income student debtors must pay on student loans. He will also try to talk loan servicing companies into initiating fewer default proceedings against debtors.
He will sidestep Congress in these efforts, reports ABC News.
In a Rose Garden appearance on Monday, Obama will announce an expansion of an existing “Pay As You Earn” program that limits student loan payments to a maximum of 10 percent of an individual’s monthly income.
Right now, only borrowers who began taking out student loans after October 2007 and who were still borrowing in October 2011 can take advantage of this program. A law passed by Congress would have broadened income-based repayment plans in about a month, anyway.
The president also wants to convince federal student loan servicers to figure out some way to help student loan borrowers avoid defaulting. The White House is still in the planning-to-plan phase on this idea, but there are plans in the words to negotiate with loan servicing companies.
Additionally, Obama wants the Department of Treasury and the Department of Education to cooperate with big tax preparers such as TurboTax and H&R Block to inform Americans about tuition tax credits and various loan repayment options.
“At a time when college has never been more important, it’s also never been more expensive,” Obama said in his Saturday radio address, according to ABC.
“I will keep doing whatever I can without Congress to help responsible young people pay off their loans.”
Obama will also throw his support and limited influence in Congress behind a plan proposed by Sen. Elizabeth Warren, D-Mass., that would allow student loan borrowers to refinance higher-interest-rate student loans with new, lower-rate loans, reports the Huffington Post.
Warren hopes to finance her scheme by forcing millionaires to pay higher taxes.
In his weekly radio address, Obama said Congress is facing a stark choice between protecting “young people from crushing debt” and protecting “tax breaks for millionaires,” according to ABC.
Republicans have already blasted the Warren proposal.
“This bill doesn’t make college more affordable, reduce the amount of money students will have to borrow, or do anything about the lack of jobs grads face in the Obama economy,” said Senate Minority Leader Mitch McConnell (R-Ky.), according to ABC.
Last month, a study from the Pew Research Center found that college graduates who are under 40 years of age and who have accumulated student debt have a median net worth of just $8,700. (RELATED: Student Debt-Laden College Grads Under 40 Have $8,700 Median Net Worth)
Career prospects for this year’s crop of newly-minted college graduates are looking incredibly bleak. Over 80 percent of all graduating seniors had zilch in the way of jobs lined up for their post-campus lives as of April, according to a poll conducted by AfterCollege, a website that connects job-seeking college students with employers. (RELATED: Just 17 PERCENT Of College Grads Have Real Jobs Waiting)
As of November 2013, cumulative student loan debt owed to the U.S. federal government had increased 463 percent during the Obama presidency. (RELATED: Student Loans Skyrocketed 463 Percent Under Obama)