WASHINGTON: US President Barack Obama is prepping new executive steps to help Americans struggling to pay off their student debt, and throwing his support behind Senate Democratic legislation with a similar goal but potentially a much more profound impact.
Obama will today announce he’s expanding his “Pay As You Earn” programme that lets borrowers pay no more than 10 percent of their monthly income in loan payments, the White House said.
Currently, the programme is only available to those who started borrowing after October 2007 and kept borrowing after October 2011. Obama plans to start allowing those who borrowed earlier to participate, potentially extending the benefit to millions more borrowers.
“At a time when college has never been more important, it’s also never been more expensive,” Obama said in his weekly radio and Internet address.
Obama also plans to announce he’s directing the government to renegotiate contracts with federal student loan servicers to encourage them to make it easier for borrowers to avoid defaulting on their loans. And he will ask the Treasury and Education departments to work with major tax preparers, including H&R Block and the makers of TurboTax, to increase awareness about tuition tax credits and flexible repayment options available to borrowers.
At the same time, Obama will use the Rose Garden appearance today to amplify his call for lawmakers to pass more sweeping legislation that would let college graduates with heavy debts refinance their loans.
The Senate is expected to debate the legislation next week, but it faces significant obstacles.
AP
