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.

November 20 3 Comments

The Man Behind ‘Mockingjay’

Francis Lawrence describes the rewards and challenges of bringing "The Hunger Games" books to the screen.

November 20 Comment

Iraq War Vet Wins National Book Award For Fiction

The judges described the short stories in Phil Klay's collection "Redeployment" as brutal, piercing and sometimes darkly funny.

November 19 10 Comments

New Film Revisits The Jerry Sandusky Sex Abuse Case

The Penn State assistant football coach will likely spend the rest of his life in prison, but that's not the end of the story.

November 19 219 Comments

Without Slavery, Would The U.S. Be The Leading Economic Power?

Edward Baptist argues in his new book that slavery was integral to establishing the America as a world economic power.