Obama Announces Lower Student Loan Payments

Oct 25, 2011 7:14pm

Continuing his “we can’t wait” campaign, President Obama today announced new executive actions to help ease the burden of student loans and boost economic growth.

“In a global economy, putting a college education within reach for every American has never been more important,” Obama said in a written statement. “But it’s also never been more expensive.”

The initiative is yet another attempt by the president to circumvent Republican opposition in Congress and grow the economy while his $447 billion jobs bill is stalled on Capitol Hill.

“Steps like these won’t take the place of the bold action we need from Congress to boost our economy and create jobs, but they will make a difference.  And until Congress does act, I will continue to do everything in my power to act on behalf of the American people,” Obama said.

The president is expected to tout the initiative in a speech Wednesday in Denver as he concludes his three-day western fundraising tour.

Under the new “Pay as You Earn” plan, student borrowers will be able to cap their loan repayments at 10 percent of their discretionary income starting next year, two years earlier than previously expected. The plan would also help people consolidate their loans and reduce their interest rates.

Roughly 1.6 million people will see a reduction in their monthly loan payments under this plan, according to White House officials.

“This has the potential to reduce the loan payments of current students, as well as new graduates, by hundreds of dollars each month,”  Education Secretary Arne Duncan said. “These are real savings that will help these graduates get started in their careers and help them make ends meet.”

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