(Dallas – June 9) – Today President Barack Obama took action on assisting recent graduates and current students with loan debt. The executive order was a continuation of his “Pay as you Earn” program and he expanded that program today by letting the borrowers pay no more than 10 percent of their income every month.
Modeling after an existing repayment plan that Obama had announced in 2011 to let borrowers pay no more than 10 percent of their monthly income in payments, but is only available for those who started borrowing after October 2007. Obama’s memo expands that program by making it open to those who borrowed anytime in the past. This new order could not come at a better time as the rising cost of higher education has left more students in debt than previous years and America’s middle class feeling trapped.
The president also endorsed a Senate Democratic bill authored by Sen. Elizabeth Warren that would allow borrowers to refinance their student loans, including those issued by private banks. It would be paid for by the so-called “Buffett Rule” which would raise taxes on millionaires.
Obama’s order would not go into effect until December of next year this will give the education department time to deal with putting the plan into place. That would also give time for other elements of Obama’s student debt plans to already be in place before borrowers opt in to the program.
By: Marcus Gilmore