Education News
Josh Lederman
Associated Press
WASHINGTON (AP) —
Up to 5 million Americans
struggling to make their
monthly student loan pay-
ments could find relief
under a program President
Barack Obama expanded
Monday, part of an election-
year push by Democrats to
paint Republicans as block-
ing common-sense steps
that could help the middle
class.
Dubbing it a “no-brainer,”
Obama also threw his sup-
port behind legislation to let
some of those same borrow-
ers refinance their student
chance through education,”
Obama said. “We are here
today because we believe
that in America, no hard-
working young person
should be priced out of a
higher education.”
With a group of student
loan borrowers looking on,
Obama put his pen to a pres-
idential memorandum that
will allow those who bor-
rowed through the federal
government before 2007 to
pay no more than 10 percent
of their income in monthly
payments. Existing pro-
grams created by Congress
and Obama already offer
that benefit to recent bor-
rowers; Obama’s memo will
Under Obama’s ‘Pay as You
Earn Plan,’ any remaining
balance is forgiven after 20
years of making payments
loans at lower rates, in a
move the administration
said could save 25 million
borrowers up to $2,000 over
the life of their loans.
“I’m only here because
this country gave me a
make it fully retroactive.
How much borrowers
could save under Obama’s
expansion depends on an
array of factors, including
income and the size of the
loan. But under one possible
scenario, an unmarried indi-
vidual who borrowed
$100,000 to pay for college
and makes $30,000 a year
could see the monthly pay-
ment drop from more than
$1,000 a month to just a few
hundred dollars.
Paying less each month
means it takes longer to pay
off the loan, but the pro-
gram is geared toward
low-income workers who
can’t afford to pay off their
loans under the standard 10-
year term. Under Obama’s
“Pay as You Earn Plan,” any
remaining balance is forgiv-
en after 20 years of making
payments.
But while Obama’s most
recent budget request listed
the cost of expanding the
program at $7.6 billion for
the first year, Education
Secretary Arne Duncan
couldn’t way what the price
tag would be for taxpayers
who support the federal
loan program.
“We actually don’t know
the costs yet,” Duncan said.
“We’ll figure that out on the
back end.”
Republican leaders fault-
ed the president for failing
to think through the costs of
the program, and noted it
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Page 8 The Portland and Seattle Skanner June 11, 2014
AP PHOTO/JACQUELYN MARTIN
Obama Launches Plan Easing Student Debt
President Barack Obama gestures as he speaks in the East Room of the White
House in Washington, Monday, June 9, 2014, before signing a Presidential
Memorandum on reducing the burden of student loan debt. the president
said the rising costs of college have left America’s middle class feeling
trapped. He says no hard-working youngster in America should be priced out
of a higher education. Obama signed a presidential memorandum he says
could help an additional 5 million borrowers.
only affects education
financing — not the under-
lying problem.
“Today’s
much-hyped
loophole closure does noth-
ing to reduce the cost of
pursuing a higher education,
or improve access to feder-
al student loans,” said
House Speaker John Boehn-
er, R-Ohio.
Obama, joined by Demo-
cratic lawmakers at the
White House, also formally
endorsed a Senate bill that
takes aim at the same prob-
lem but could have a more
profound effect by allowing
by allowing borrowers to
refinance their student debt
at lower rates currently
being offered.
Read the rest online at
www.theskanner.com