President Obama Extends Student Loan Debt Relief

The federal program would allow student borrowers to pay no more than 10 percent of what they earn in the workforce.
3:53 | 06/09/14

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Transcript for President Obama Extends Student Loan Debt Relief
Okay. It is Monday June 9 Wall Street is open and today's big number lot of -- there a trillion. Dollars. How much outstanding student loan debt there is -- -- It's a staggering sometimes it's wrangling amount but later today. The president is gonna do something about it. Everyone I'm Dan Adler in New -- could explain the latest on this -- -- -- -- join us this Monday morning. So some might explain this this plan by the White House that -- to -- student loan situation this country. Shorts and the president is expected to expand a federal program that will allow borrowers student borrowers. To essentially capped their expenses to -- in paying back student that so essentially allow them to pay. No more than 10% of what they earn after their in the work force and then after twenty years if there's a principal balance up there hasn't paid back it'll be forgiven thirty minutes and provisions in there if you work in certain. Nonprofit industry's -- you have an accelerated. Forgiveness period so obviously what the government is going to do here is create. A new subsidy. Four student loan borrowing and you know it seems as if it's going to be pretty popular otherwise the president probably wouldn't be rushing. Trying to get this out there. The apartment with a lot of people including my producer who is crying -- on a daily basis because he's now back to send to children to college which is no easy feat for anyone right now. Yeah here's some of the numbers let's take a looking to receive Kansas researcher. Did some work on this -- -- -- homes with out student loan debt have a net worth nearly three times. Of homes that do you have loans outstanding and the Pew Research Center says about 40% of those homes led by -- 35 and under. In fact have loans you know so it's basically look at is -- loans are keeping a lot of young Americans in a financial -- essentially. It is yes you know what happens is it wherever there's the greatest availability to borrow that is where the greatest borrowing takes place in the federal government has. You know provided in this and backstop. Student lending for so long had such a bad job market people stay in school longer it seem like the only way out of it was to get that college degree so clearly we had all these dynamics in place to have this ballooning student debt now we're dealing with -- -- in the overhang from it. So yeah there's no doubt about it it's it's something that's really holding back -- general economic recovery and some level people talking about how. The -- 29 year old in the workforce is so much less equipped to potentially buy -- home and and kind of form -- household. Then either prior generations and so that's what this is meant to address we should point out it's only going to apply to federally backed -- the student loans it's not necessarily going to. Really knocked down that trillion dollar number very much but it will create I think a path to manage student debt that's already out there. I'll -- -- we're top of the cut it is popular for a lot of students obvious in their parents as well but what about congressional approval what about the politics at all because it is essentially is a pay as you -- Action correct. Yes well it is -- I you know my sense of it is that you do have some kind of principled objection to the idea of creating this additional new government subsidy but in practice it's very very hard to come out against the idea of trying to ease the student loan burdens I think the calculation. By the White House is that yes you're gonna have people screaming. You know I think Lamar Alexander senator Lamar Alexander has that it's a very small number of graduate students that piles of all this -- -- the ones that are mostly you know kind of responsible so to speak for. But I I think in general. They don't anticipate a lot of actual main street opposition to this which theoretically should mean they should managed to get something like this for a. And we'll have to wait and see exactly how much how how easy that -- will be the announcement -- made my -- -- -- -- finance on this Monday morning Mike thanks much appreciated thank you. And of course -- about the latest headlines right here at abcnews.com. You that much -- number. And -- -- New York.

This transcript has been automatically generated and may not be 100% accurate.

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