News

Obama moves to ease student loan burdens, urges Congress to act

Obama moves to ease student loan burdens, urges Congress to act

STUDENT LOANS:U.S. President Barack Obama speaks before he signs a presidential memorandum on reducing the burden of student loan debt in the East Room of the White House in Washington, June 9. Photo: Reuters/Larry Downing

By Mark Felsenthal

WASHINGTON (Reuters) – President Barack Obama on Monday signed an executive order making it easier for up to 5 million people to pay off college tuition debt, and scolded congressional Republicans for opposing legislation that would lower student-loan borrowing costs.

The action, which does not take effect until December 2015, will allow more people to limit repayments of federal student loans to 10 percent of their monthly incomes.

The administration will also try to lower student costs by renegotiating government contracts with companies like Sallie Mae that service student loans, he said.

The president said Congress should also take steps to ease debt burdens on students, 71 percent of whom earn bachelor’s degrees with debt, which averages $29,400.

Senate Democrats have proposed legislation that would allow millions of Americans to refinance both federal and private undergraduate student loans at lower interest rates.

The bill is unlikely to overcome the opposition of Republicans, who say the measure would come at too high a cost for the government. Obama said Republicans were not doing enough to support students, arguing that it should be possible for graduates to get a lower interest rate in the same way homeowners are able to.

“If you’re a Big Oil company, they’ll go to bat for you,” he said. “If you’re a student, good luck.”

Democrats hope the issue will distinguish them from Republicans in the eyes of voters and help them retain control of the Senate in November elections, Guggenheim Partners analyst Chris Krueger said.

“This Democratic pivot to student loan forgiveness is entirely political and is not designed to become law but rather to be used as a wedge issue in the midterm elections,” Krueger wrote in a research note to clients.

(Reporting By Mark Felsenthal; Editing by David Gregorio)

Recent Headlines

in Sports

No change for NASCAR in 2015

Fresh
harvick

NASCAR won't change its new championship format.

in Sports

Tuesday’s Sports Minute

Fresh
kobe

A look at some of the big sports stories making news today, Tuesday, Jan. 27.

in National

PHOTOS: Scenes from the storm

AP278999665965_11

Some of our favorite photos and tweets from #Snowmageddon2015.

in Sports

Nearly half of Americans think Patriots are cheaters, poll shows

Updated
pats

Many sports fans believe the Super Bowl-bound New England Patriots, engulfed in the so-called "DeflateGate" scandal, are cheaters.

in Sports

Former Red Sox pitcher Monbouquette dead at 78

Updated
monbouquette

The right-hander also player for the Detroit Tigers, New York Yankees, and San Francisco Giants.