More students than ever before are relying on student loans to pay for their college education. 71 percent of students earning a bachelor's degree graduate with debt, averaging $29,400. While most students are able to repay their loans, many feel burdened by debt, especially as they seek to start a family, buy a home, launch a business, or save for retirement.
That's why, as part of his year of action to expand opportunity for all Americans, President Obama is taking steps to make student loan debt more affordable and manageable to repay.
Earlier this afternoon, the President signed a memorandum directing the Secretary of Education to propose regulations that would allow nearly 5 million federal direct student loan borrowers the opportunity to cap their student loan payments at 10 percent of their income. The memorandum also outlines new executive actions to support federal student loan borrowers, especially vulnerable borrowers who may be at greater risk of defaulting on their loans.
But in his remarks at the signing, the President made clear that Congress needs to take action as well, saying that today's executive action will "make progress, but not enough." He brought up the bill written by Sen. Elizabeth Warren that would allow students to refinance their student loans at today's lower interest rates, noting that "it pays for itself by closing loopholes that allow some millionaires to pay a lower tax rate than middle-class families."
The President then detoured briefly from his prepared remarks, explaining why it's a "no-brainer" for Congress to pass the bill:
You would think that if somebody like me has done really well in part because the country has invested in them, that they wouldn’t mind at least paying the same rate as a teacher or a nurse. There’s not a good economic argument for it, that they should pay a lower rate. It’s just clout, that’s all. So it’s bad enough that that’s already happening. It would be scandalous if we allowed those kinds of tax loopholes for the very, very fortunate to survive while students are having trouble just getting started in their lives.
So you’ve got a pretty straightforward bill here. And this week, Congress will vote on that bill. And I want Americans to pay attention to see where their lawmakers’ priorities lie here: lower tax bills for millionaires, or lower student loan bills for the middle class.
"This week, [Congress has] a chance to help millions of young people," President Obama said. "I hope they do. ... And in the meantime, I’m going to take these actions today on behalf of all these young people here, and every striving young American who shares my belief that this is a place where you can still make it if you try."
And in case you missed it, the President will take to Tumblr tomorrow to answer your questions about education, college affordability, and reducing student loan debt. Tune in tomorrow at 4:00 p.m. ET.