President Obama to Expand Program Easing Student Loan Repayments

Story by Bloomberg
Written by Roger Runningen

President Barack Obama will order the Department of Education today to expand a program that would ease student loan repayments for about 5 million people.

Under a 2010 “Pay as You Earn” law, borrowers make repayments of no more than 10 percent of their monthly income. The benefit applies only to those who started borrowing after October 2007, shortly before the recession began. The executive order would widen the eligibility to people who took out loans before October 2007.

The new rules would take effect in December 2015, according to the White House.

“While most students are able to repay their loans, many feel burdened by debt, especially as they seek to start a family, buy a home, launch a business, or save for retirement,” the White House press office said in a statement.

Young voters gave Obama decisive majorities in his two presidential runs and Democrats are attempting to turn out that voting bloc for the November congressional elections. With much of his agenda blocked by the Republican-controlled House, Obama has used executive actions to bypass Congress on initiatives that appeal to the party’s base.

Republican Senator Lamar Alexander of Tennessee, called the executive action a “political stunt” that will have only a small impact on the majority of people with student loans. He said the effort would be better spent on measures to increase employment.

“College graduates don’t need a $1-a-day taxpayer subsidy to help pay off a $27,000 loan,” Alexander said in a statement. “They need a good job.”

Read more: http://www.bloomberg.com/news/2014-06-09/obama-to-expand-program-easing-student-loan-repayments.html