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 Sports

Cavaliers beat Hawks in series opener

Fresh
14-overlay-1

A week off did not disrupt the Cleveland Cavaliers' momentum, nor was it enough time to alter the Atlanta Hawks' history against them. The Cavaliers still have never lost to the Hawks in the postseason, but this one was not easy.

1 hour ago in Sports

Murray makes his mark as Pens beat Caps

Fresh
capsREUTERS

The Pittsburgh Penguins do not have a goal yet in the series from Sidney Crosby. Or a power-play goal. What they do have is a 2-1 lead over the Washington Capitals.

1 hour ago in Sports

British soccer team Leicester celebrates 5,000-1 title success

Fresh
leichesterREUTERS

Leicester City's Premier League title dream became reality on Monday when one of the greatest sporting fairytales reached its conclusion in west London where chasing Tottenham Hotspur were held 2-2 by Chelsea.

1 hour ago in National

Obama takes Supreme Court fight to Republican senators’ home turf

Fresh
obamaREUTERS

President Barack Obama on Monday took the political battle over his pick for a vacancy on the U.S. Supreme Court to the home states of seven Republican senators up for re-election in November.

2 hours ago in Entertainment, Sports

Hulk Hogan seeks second slam of Gawker over racist comments leak

Fresh
Terry Bollea, known as professional wrestler Hulk Hogan, listens while testifying in his case against the news website Gawker at the Pinellas County Courthouse, in St. Petersburg, Fla., Monday, March 7, 2016. Hogan is suing Gawker for $100 million for publishing a video of him having sex with his best friend's wife. (Boyzell Hosey/Tampa Bay Times via AP, Pool)

Hulk Hogan accused Gawker of leaking his racist remarks in a lawsuit filed in Florida on Monday involving a secretly-recorded sex tape of the wrestling celebrity, who recently won $140 million in damages against the media website in a related case.