90.9 WBUR - Boston's NPR news station
Top Stories:
PLEDGE NOW
Here and Now with Robin Young
Public radio's live
midday news program
With sponsorship from
Mathworks - Accelerating the pace of engineering and science
Accelerating the pace
of engineering and science
Wednesday, October 26, 2011

Obama Reduces Student Loan Burden

In this Oct. 6, 2011 photo, Gan Golan, of Los Angeles, dressed as the "Master of Degrees," holds a ball and chain representing his college loan debt, during Occupy DC activities. (AP)

In this Oct. 6, 2011 photo, Gan Golan, of Los Angeles, dressed as the "Master of Degrees," holds a ball and chain representing his college loan debt, during Occupy DC activities. (AP)

For the second time this week, President Obama will use his executive authority, this time to lower monthly college loan payments.

The plan will allow millions of student loan recipients to lower their payments and consolidate their loans, in hopes of easing the burden of the No. 2 source of household debt.

Obama’s planned announcement in Denver comes the same day as a new report on tuition costs from the College Board. It shows average in-state tuition and fees at four-year public colleges rose $631 this fall, or 8.3 percent, compared with a year ago. Nationally, the cost of a full credit load has passed $8,000, an all-time high.

The White House said Obama will use his executive authority to provide student loan relief in two ways.

First, he will accelerate a measure passed by Congress that reduces the maximum required payment on future student loans from 15 percent of discretionary income annually to 10 percent. The White House wants it to go into effect in 2012, instead of 2014. In addition, the White House says the remaining debt would be forgiven after 20 years, instead of 25.

About 1.6 million borrowers could be affected.

Second, he will allow borrowers who have a current loan from the Federal Family Education Loan Program and a direct loan from the government to consolidate them into one loan. The consolidated loan would carry an interest rate of up to a half percentage point less than before. This could affect 5.8 million more borrowers.

Some critics have said the plan would end up leaving taxpayers on the hook for the balance of loans that go unpaid, amounting to a student aid stimulus.

(Written with reporting from the AP)

Guest:

  • Tamar Lewin, New York Times national reporter covering education

Please follow our community rules when engaging in comment discussion on this site.
Robin and Jeremy

Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

October 20 Comment

Alternate Routes: Lasting Impressions From The Road

Our digital and social media producer Rachel Rohr is back from a month-long trip cross-country, talking with young Americans.

October 20 Comment

Mario Batali Goes Farm To Table

The chef and restaurateur discusses the "farm to table" trend and shares recipes with a hearty and rustic twist.

October 17 2 Comments

Toll Lanes: Coming Soon To Almost Every Major City In Florida

Reporting by the Florida Center for Investigative Reporting found the toll lanes are developed without much public input, and without reliable knowledge of the cost.

October 17 Comment

USAID: Challenges And Small Victories In Liberia

The Ebola outbreak in West Africa has killed more than 4,500 people in the region with an estimated 8,900 more people currently infected.