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 Local

State Lawmaker: IDOT Not the Only Agency Whose Hiring Process May be Suspect

idot

Federal monitor to check agency on hiring practices

in Local

Rauner Denies Involvement in Springfield Reporter’s Resignation

Illinois Republican gubernatorial candidate businessman Bruce Rauner participates in a Republican gubernatorial candidate debate Tuesday, Feb. 18, 2014, in Springfield, Ill. The four Republican gubernatorial candidates said that they’ll be willing to work with unions if elected but differed on how to approach the relationship during a downstate debate that largely focused on pension reform, taxes and just briefly on personal issues that have dogged some of the candidates.

Bruce Rauner says his fingerprints are not on the Chicago Sun-Times.

in Local

Raymond Cub Scouts Still Improving

medical

Police say the condition of three Cub Scouts is improving after they were injured in a chemical explosion.

in Local

Springfield Unemployment Numbers Show Decline

jobs

Unemployment dropped in all of Illinois' metro areas in September

in Election 2014, Local

Durbin: Sun-Times Reporter’s Departure “Worrisome”

Republican state Sen., Jim Oberweis, right, offers to give Democratic U.S. Sen. Dick Durbin, more paper after Durbin joked about only getting one page of paper for notes before their first of two televised debates prior to the Nov. 4 election Wednesday, Oct. 22, 2014, in Chicago. Oberweis, a dairy entrepreneur from Sugar Grove, has acknowledged it will take a big GOP year to unseat Durbin, the second-ranking Democrat in the U.S. Senate who's represented Illinois on Capitol Hill for more than three decades.

Bruce Rauner’s campaign is being accused of bullying the Chicago Sun-Times, and U.S. Sen. Dick Durbin (D-Ill.) says that should be a troubling sign to voters.