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

1 hour ago in Local

Springfield City Council to Discuss Waste Hauling Fee Increase

Fresh
garbage

The Springfield City Council may or may not consider raising garbage fees next month.

8 hours ago in Local

Dems Slate Two Candidates for Fall Election

vote

Democrats have slated Robert Spencer of Pleasant Plains to run against Don Gray for Sangamon County Clerk, while Circuit Clerk Paul Palazzolo will face opposition from Donnie Killen of Springfield.

8 hours ago in Local

Redfield: Capitol Has Similar, But Different, Feeling

ILLINOIS POLITICS 7-24-15 Mike Lawrence and Kent Redfield

University of Illinois Springfield Political Science Kent Redfield says in some ways, it actually feels like lawmakers are getting toward the end of the legislative session.

8 hours ago in Local, Sports

Nunn Dismissed from U of I Basketball Team

university illinois

The University of Illinois has dismissed junior guard Kendrick Nunn from the basketball team following his guilty plea to misdemeanor domestic battery.

8 hours ago in Local

Informant Suggests Drew Peterson Wants to Sell Drugs

FILE - In this May 8, 2009 file photo, former Bolingbrook, Ill., police sergeant Drew Peterson arrives at the Will County Courthouse in Joliet, Ill., for his arraignment on charges of first-degree murder in the 2004 death of his third wife Kathleen Savio. On Thursday, Feb. 21, 2013, Will County Judge Edward Burmila sentenced Peterson to 38 years in prison for Savio's murder.  (AP Photo/M. Spencer Green, File)

Secret recordings between Drew Peterson and an inmate he's accused of trying to enlist to help kill a prosecutor show that the former suburban Chicago police officer discussed selling drugs in Mexico if he gets out of prison.