President Obama declared 2014 a year of action – vowing to use the power of his pen and phone to help ensure that hardworking Americans have the opportunity to succeed. And this week will be no different. With a focus on supporting hardworking Americans and upholding our country’s commitment to provide a quality education for all of our students, the President is again taking action. Today, he will deliver remarks at the White House, announcing new executive actions to further lift the burden of crushing student loan debt, including a Presidential Memorandum that will allow an additional 5 million borrowers with federal student loans to cap their monthly payments at just 10 percent of their income.
Many student loan borrowers are working and trying to responsibly make their monthly payments, but are nonetheless struggling with burdensome debt. For example, a 2009 graduate earning about $39,000 a year as a fourth year teacher, with student loan debt of $26,500, would have his or her initial monthly payments reduced by $126 under the President’s Pay As You Earn plan compared with monthly payments under the standard repayment plan and would see a reduction in annual loan payments of over $1,500.
Doing All We Can to Help Students Repay their Loans: The President today will also direct the Secretaries of Education and the Treasury to work together to do all they can to help borrowers manage their student loan debts. Specifically, the Departments will:
- Strengthen Incentives for Loan Contractors to Serve Students Well
- Ensure Active-Duty Military Get the Relief They Are Entitled to
- Work with the Private Sector to Promote Awareness of Repayment Options
- The Administration will work with Intuit to explore ways to communicate with federal student loan borrowers through Intuit’s free personal financial management product, Mint.com
- Use Innovative Communication Strategies to Help Vulnerable Borrowers
- Promote Stronger Collaborations to Improve Information for Students and Families
25% of grads can get public-service debt forgiveness President Obama issued an executive order on Monday to make it easier for students to reduce payments on their debt and allow loan forgiveness after 20 years instead of 25 years. But getting a job in the public service can also completely wipe out all debt after just 10 years.
Student-loan forgiveness may be overstated President Obama announced Monday that he is expanding, by executive order, a program that caps certain federal student loan payments at 10 percent of discretionary income and forgives the remaining balance after 20 years. But the White House “fact sheet” neglected to provide a key fact: who qualifies for the expanded program.
Obama pressures Republicans to pass student loan bill President Obama slammed congressional Republicans Monday to for refusing to close tax loopholes for the wealthy as a way to pay for initiatives like lowering student loan interest rates and increasing the minimum wage. “It would be scandalous if we allowed those kinds of tax loopholes for the very, very fortunate to survive while students are having trouble just getting started in their lives,” the president said during a White House speech aimed at unveiling ways to ease the burden of student loans. “If you’re a big oil company they’ll go to bat for you. If you’re a student, good luck. Some of these Republicans in Congress seem to believe that just because some of the young people behind me need some help, that they’re not trying hard enough.”