Student loan | FACTSHEET: Making <b>Student Loans</b> More Affordable | The White <b>...</b> |
- FACTSHEET: Making <b>Student Loans</b> More Affordable | The White <b>...</b>
- Republicans Just Killed Elizabeth Warren's Plan to Ease Americans <b>...</b>
- Presidential Memorandum -- Federal <b>Student Loan</b> Repayments <b>...</b>
- President Obama on <b>Student Loan</b> Debt: "No Hardworking Young <b>...</b>
| FACTSHEET: Making <b>Student Loans</b> More Affordable | The White <b>...</b> Posted: 09 Jun 2014 04:55 AM PDT The White House Office of the Vice President For Immediate Release June 09, 2014 President Obama declared 2014 a year of action – vowing to use the power of his pen and phone to help ensure that hardworking Americans have the opportunity to succeed. And this week will be no different. With a focus on supporting hardworking Americans and upholding our country's commitment to provide a quality education for all of our students, the President is again taking action. Today, he will deliver remarks at the White House, announcing new executive actions to further lift the burden of crushing student loan debt, including a Presidential Memorandum that will allow an additional 5 million borrowers with federal student loans to cap their monthly payments at just 10 percent of their income. A fact sheet detailing these new steps is below. Tomorrow the President will do a live Q and A with Tumblr, answering questions directly from consumers across the country about this crucial issue. At both of those events, and throughout this week ahead of their upcoming vote, the President will use every opportunity to urge Congress to do their part by passing Senate Democrats' bill to help more young people save money by refinancing their federal student loans. From reforming the student loan system and increasing Pell Grants to offering millions of students the opportunity to cap their monthly student loan payments at 10 percent of their income, making a degree more affordable and accessible has been a longtime priority for the President. But he knows there is much more work to do and that's what this week is all about. FACTSHEET: Making Student Loans More Affordable A postsecondary education is the single most important investment that Americans can make in their futures. Higher education results in higher earnings and a lower risk of unemployment, but for too many low- and middle-income families this essential rung on the ladder to opportunity and advancement is slipping out of reach. Over the past three decades, the average tuition at a public four-year college has more than tripled, while a typical family's income has barely budged. More students than ever are relying on loans to pay for college. Today, 71 percent of those earning a bachelor's degree graduate with debt, which averages $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. The President and his Administration have a long track record of taking steps to make college more affordable and accessible for families. And as part of his year of action to expand opportunity for all Americans, the President is committed to building on these efforts by using his pen and his phone to make student debt more affordable and more manageable to repay. Today the President will use the power of his pen to help millions of borrowers afford their student loan payments. He will sign a new Presidential Memorandum directing the Secretary of Education to propose regulations that would allow nearly 5 million additional federal direct student loan borrowers the opportunity to cap their student loan payments at 10 percent of their income. The Presidential Memorandum also outlines a series of new executive actions aimed to support federal student loan borrowers, especially for vulnerable borrowers who may be at greater risk of defaulting on their loans. Today the President will also reiterate his call for the Senate to pass legislation that could help an estimated 25 million Americans refinance outstanding student loans at lower interest rates, the same as those available to federal student loan borrowers taking out loans this year. This move could save a typical student $2,000 over the life of his or her loans. The Challenge of Student Debt: The challenges of managing student loan debt can lead some borrowers to fall behind on their loan payments and in some cases even default on their debt obligation, with such consequences as a damaged credit rating, losing their tax refund, or garnished wages. Because credit ratings are increasingly scrutinized in making employment offers, financing a home, or even opening a bank account, a damaged credit rating can further reduce borrowers' ability to repay their loans. Today's actions build on the Administration's significant progress in creating flexible repayment options for borrowers and raising awareness about the steps borrowers can take to responsibly manage their debt. Capping Student Loan Payments at 10 Percent of Income: Today, the President will direct the Secretary of Education to ensure that student loans remain affordable for all who borrowed federal direct loans as students by allowing them cap their payments at 10 percent of their monthly incomes. The Department will begin the process to amend its regulations this fall with a goal of making the new plan available to borrowers by December 2015. With legislation passed by Congress and signed by the President in 2010 and regulations adopted by the Administration in 2012, most students taking out loans today can already cap their loan payments at 10 percent of their incomes. Monthly payments will be set on a sliding scale based upon income. Any remaining balance is forgiven after 20 years of payments, or 10 years for those in public service jobs. However, this Pay As You Earn (PAYE) option is not available to students with older loans (those who borrowed before October 2007 or who have not borrowed since October 2011), although they can access similar, less generous options. No existing repayment options will be affected, and the new repayment proposal will also aim to include new features to target the plan to struggling borrowers. This executive action is expected to help up to 5 million borrowers who may be struggling with student loans today. For students that need to borrow to finance college, PAYE provides an important assurance that student loan debt will remain manageable. Because the PAYE plan is based in part on a borrower's income after leaving school, it shares with students the risk of taking on debt to invest in higher education. Many student loan borrowers are working and trying to responsibly make their monthly payments, but are nonetheless struggling with burdensome debt. For example, a 2009 graduate earning about $39,000 a year as a fourth year teacher, with student loan debt of $26,500, would have his or her initial monthly payments reduced by $126 under the President's Pay As You Earn plan compared with monthly payments under the standard repayment plan and would see a reduction in annual loan payments of over $1,500. Doing All We Can to Help Students Repay their Loans: The President today will also direct the Secretaries of Education and the Treasury to work together to do all they can to help borrowers manage their student loan debts. Specifically, the Departments will:
Additional Actions to Reduce Indebtedness and Promote College Affordability: Helping Students and Families Access Education Tax Benefits. In addition to helping borrowers manage their student loan debt, the Department of Education and the Department of Treasury will also work together to educate students, families, financial aid administrators, and tax preparers to ensure that all students and families understand what education tax benefits they are eligible for and receive the benefits for which they qualify. In 2009, the President created the American Opportunity Tax Credit (AOTC), which provides up to $2,500 to help pay for each year of college. But the process of claiming education tax credits like the AOTC can be complex for many students, including for the 9 million students who receive Pell Grants, and hundreds of millions of dollars of education credits go unclaimed each year. To help address this complexity, the Department of Treasury will release a fact sheet clarifying how Pell Grant recipients may claim the AOTC.  |
| Republicans Just Killed Elizabeth Warren's Plan to Ease Americans <b>...</b> Posted: 11 Jun 2014 09:49 AM PDT Sen. Elizabeth Warren (D-Mass.) can't catch a break. Senate Republicans voted Wednesday morning to block her latest piece of liberal reform. The Senate voted 56-38 in favor of Warren's bill to help ease the burden of student loan debt. Despite a majority of senators approving the measure, it failed to reach the 60 votes needed to overcome Republicans' filibuster of the measure. Warren's bill is a simple concept. Current students can take out government loans at 3.86 percent interest, a cheaper rate than many of the loans held by past generations of students. The bill would also allow borrowers to refinance their current loans down to that lower rate. Student loans have become a major drag on the economic fortunes of young Americans, hampering their ability to take risks in seeking jobs and delaying their ability to make the sort of purchases (cars, homes, etc.) that have typically defined a middle-class American life. More than 40 million people still owe money for their higher education. The total pool of loans still owed currently hovers over $1.2 trillion, more than the country's outstanding credit card debt. About 15 percent of student loans go into default within three years. The main reason Republicans objected to the measure has less to do with the idea of easing student loan debt, and more with the mechanism Warren used to offset the cost of refinancing those loans. It would cost the government $51 billion over the next decade to allow borrowers to refinance. But Warren's bill would have actually reduced the deficit, bringing in $72 billion in new revenues by implementing the so-called Buffet Rule, an added surcharge tax on millionaires to ensure that they pay at least 30 percent of their income in taxes. "It's a basic question on our values," Warren told the Boston Globe this week. "Does this country protect millionaires' and billionaires' tax loopholes? Or does it try to help young people who are just starting their economic lives?" But when even conservative fire-breathers in Republican leadership are tossed aside as RINOs, anything with the whiff of a tax increase is off the table for Republicans. Instead, it's easier to ignore the troubles of young Americans wallowing in debt. Senate Democrats aren't finished pushing Warren's bill, though. Democrats up for reelection this year have been using the bill to hammer their opponents, and the party has rolled it into their wider push for aiding women, since women are more likely to attend college but earn less for their degrees than their male peers. |
| Presidential Memorandum -- Federal <b>Student Loan</b> Repayments <b>...</b> Posted: 09 Jun 2014 11:24 AM PDT The White House Office of the Press Secretary For Immediate Release June 09, 2014 June 9, 2014 MEMORANDUM FOR THE SECRETARY OF THE TREASURY SUBJECT: Helping Struggling Federal Student Loan Borrowers Manage Their Debt A college education is the single most important investment that Americans can make in their futures. College remains a good investment, resulting in higher earnings and a lower risk of unemployment. Unfortunately, for many low- and middle-income families, college is slipping out of reach. Over the past three decades, the average tuition at a public four-year college has more than tripled, while a typical family's income has increased only modestly. More students than ever are relying on loans to pay for college. Today, 71 percent of those earning a bachelor's degree graduate with debt, which averages $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. Over the past several years, my Administration has worked to ensure that college remains affordable and student debt is manageable, including through raising the maximum Pell Grant award by nearly $1,000, creating the American Opportunity Tax Credit, and expanding access to student loan repayment plans, where monthly obligations are calibrated to a borrower's income and debt. These income-driven repayment plans, like my Pay As You Earn plan, which caps a Federal student loan borrower's payments at 10 percent of income, can be an effective tool to help individuals manage their debt, and pursue their careers while avoiding consequences of defaulting on a Federal student loan, such as a damaged credit rating, a tax refund offset, or garnished wages. While my Administration has made significant strides in expanding repayment options available to borrowers and building awareness of income-driven repayment plans, more needs to be done. Currently, not all student borrowers of Federal Direct Loans can cap their monthly loan payments at 10 percent of income, and too many struggling borrowers are still unaware of the options available to them to help responsibly manage their debt. Therefore, by the authority vested in me as President by the Constitution and the laws of the United States of America, I hereby direct the following: Section 1. Expanding the President's Pay As You Earn Plan to More Federal Direct Loan Borrowers. Within 1 year after the date of this memorandum, the Secretary of Education shall propose regulations that will allow additional students who borrowed Federal Direct Loans to cap their Federal student loan payments at 10 percent of their income. The Secretary shall seek to target this option to those borrowers who would otherwise struggle to repay their loans. The Secretary shall issue final regulations in a timely fashion after considering all public comments, as appropriate, with the goal of making the repayment option available to borrowers by December 31, 2015. Sec. 2. Improving Communication Strategies to Help Vulnerable Borrowers. By December 31, 2014, the Secretary of Education shall develop, evaluate, and implement new targeted strategies to reach borrowers who may be struggling to repay their Federal student loans to ensure that they have the information they need to select the best repayment option and avoid future default. In addition to focusing on borrowers who have fallen behind on their loan payments, the Secretary's effort shall focus on borrowers who have left college without completing their education, borrowers who have missed their first loan payment, and borrowers (especially those with low balances) who have defaulted on their loans to help them rehabilitate their loans with income-based monthly payments. The Secretary of Education shall incorporate data analytics into the communications efforts and evaluate these new strategies to identify areas for improvement and build on successful practices. Sec. 3. Encouraging Support and Awareness of Repayment Options for Borrowers During Tax Filing Season. By September 30, 2014, the Secretary of the Treasury and the Secretary of Education shall invite private-sector entities to enter into partnerships to better educate borrowers about income-based repayment plans during the tax filing season in 2015. Building off of prior work, the Secretaries shall further develop effective ways to inform borrowers about their repayment options during the tax filing season in 2015, as well as through personalized financial management tools. Sec. 4. Promoting Stronger Collaboration to Ensure That Students and Their Families Have the Information They Need to Make Informed Borrowing Decisions. By September 30, 2014, the Secretary of Education, in consultation with the Secretary of the Treasury, shall develop a pilot project to test the effectiveness of loan counseling resources, including the Department of Education's Financial Awareness Counseling Tool. The Secretary of Education shall convene higher education experts and student-debt researchers to identify ways to evaluate and strengthen loan counseling for Federal student loan borrowers. Additionally, the Secretaries shall collaborate with organizations representing students, teachers, nurses, social workers, entrepreneurs, and business owners, among others, to help borrowers represented by these organizations learn more about the repayment options that are available to them in financing their investment in higher education and managing their debt, and to provide more comparative, customized resources to those borrowers when possible. Sec. 5. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect: (i) the authority granted by law to an agency, or the head thereof; or (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals. (b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations. (c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. (d) The Secretary of Education is hereby authorized and directed to publish this memorandum in the Federal Register. BARACK OBAMA |
| President Obama on <b>Student Loan</b> Debt: "No Hardworking Young <b>...</b> Posted: 09 Jun 2014 03:59 PM PDT 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. Earlier this 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:
 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) "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 today'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 tomorrow to answer your questions about education, college affordability, and reducing student loan debt. Tune in tomorrow at 4:00 p.m. ET. |
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