President Obama on Student Loan Debt: “No Hardworking Young Person Should Be Priced Out of a Higher Education”

Cross-posted from the White House blog.

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President Barack Obama signs a Presidential Memorandum on reducing the burden of student loan debt, in the East Room of the White House, June 9, 2014. (Official White House Photo by Lawrence Jackson)

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.

On Monday 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.”

Read the President’s full remarks from Monday’s signing, and learn more about how the President is working to make college more affordable.

And in case you missed it, the President will take to Tumblr this afternoon to answer your questions about education, college affordability, and reducing student loan debt. Tune in today at 4:00 p.m. ET.

David Hudson is associate director of content for the Office of Digital Strategy at the White House.

3 Comments

  1. I pay just under 1K a month with half of my loans through Department of Ed at 10 and 12%. If I’m paying my loans on time why should I be charged 1990 interest rates for a loan that ultimately supports my family and my part of the government through my taxes? These aren’t high risk loan that must be charged at a high rate – they are loans that are guaranteed for repayment even under bankruptcy. The government or someone is getting fat off these outrageous usury fees – let’s get moving on some reprieve before things get too tight to manage. All I’m asking is for a fair rate, don’t need a BAILOUT or anything.

    Judge the lot of them all you want, but if they can manage to put this through, they are warriors to me.

  2. I am 61, and have hardly any savings. I have a daughter age 19, who is a sophomore in college. I am the widow of am honorably discharged 100% disabled veteran. I am entitled I believe to some veteran’s spousal benefits. At the age of 61, I would like to become a literacy teacher with a master’s degree in literacy tutoring. How do I go about getting a job as a customer service rep for The student loan repayment program at a customer service telephone center? Can you help me get a job at one of these centers? Please let me know. My name is: in the preliminary box with the email info: mintz.urquhart@gmail.com

  3. Today, the US Dept. of Education is garnering my wages, cause much financial distress. When can the department help me with this new executive order?

    Thanks.

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