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 Music

This week’s top rock tracks

foofighters

LISTEN: This week's top rock songs, according to the latest Billboard chart.

in Music

Ozzy Osbourne to undergo surgery

British musicians Ozzy Osbourne of Black Sabbath, arrives at the Classic Rock Roll of Honour awards 2013 at the Camden Roundhouse in north London, Thursday, Nov. 14, 2013.

Ozzy Osbourne has cancelled his upcoming Ozzfiesta event in Mexico to undergo surgery.

in Weird

Belligerent birds chase people at Florida park

Actress Tippi Hedren, star of the 1963 Alfred Hitchcock film "The Birds," poses with Julian Jarrold, center, director of the HBO film "The Girl," and cast member Toby Jones on Wednesday, Aug. 1, 2012 in Beverly Hills, Calif. Hedren's relationship with Hitchcock during the making of the film is the subject of the HBO film "The Girl."

In a scene straight out of Alfred Hitchcock's "The Birds," some out-of-control birds are chasing people at a central Florida park.

in Trending, Viral Videos

TODAY’S MUST SEE: Billy Zane mistakenly thanks One Direction fans for support

Billy Zane arrives at the Global Green USA's 12th Annual Pre-Oscar Party at the Avalon Hollywood on Wednesday, Feb. 18, 2015, in Los Angeles.

Actor Billy Zane pokes fun at the fact he shares a similar name to former One Direction member Zayn Malik in a new video.

in Weird

Loose police horse briefly on patrol in downtown Cleveland

horse

The horse stayed on the street during his escape but didn't stop at red lights.