The Obama administration unveiled a plan to make it easier, and cheaper, for students to repay their student loans—all as part of a broader strategy to hammer on Congressional Republicans for failing to enact his jobs plan.
Using his executive authority, President Obama plans to accelerate an income-based loan repayment plan Congress approved in 2010. Currently, the plan would cap loan repayments at 10 percent of discretionary income beginning in 2014. Obama will start the 10 percent cap in 2012. (Anyone who takes out a loan in 2012 would be eligible.) Administration officials estimate this will lower payments for 1.6 million borrowers.
“These are real savings that will help these graduates get started on their careers,” U.S. Secretary of Education Arne Duncan said in a conference call today with reporters announcing the initiative.
In addition, the plan will make it easier for students to consolidate certain federal loans.
Obama will talk up the new initiative tomorrow, at the University of Colorado, Denver.
“We have to act now ... we can’t wait for Congressional Republicans,” White House domestic policy director Melody Barnes said in the conference call, reiterating the administration’s new message that the economy continues to falter as Congressional Republicans refuse to consider a jobs bill.
But it’s not as if this particular student loan plan is a jobs creation plan, nor one that Congress is refusing to act on. When a reporter asked Barnes to clarify how lessening the burden on student borrowers was a jobs-creation effort, she said: “Obviously the two things are tied together.”
She said the overall goal, in the view of Obama officials, is to lessen the burden on college students so it’s easier for them to attend college, graduate, get and keep good jobs, and even take on lesser-paying public-sector jobs (like teaching), if they want.