Student debt is a $1.2 trillion shadow cast over the lives of tens of millions of Americans, and it's getting longer each year. President Obama has a plan to make it easier for borrowers to pay it all off.
Today, he announces an executive order to cap student-debt repayments at just 10 percent of income. This expanded pay-as-you-earn plan (which already exists for recent borrowers) should be welcome news for young people struggling to find steady work. Gainfully employed grads would pay just $0.10 for every $1. Unemployed grads might pay nothing. After 20 years of following these rules, remaining debt would be wiped clean.
The president will also throw his support behind Sen. Elizabeth Warren's plan to refinance student loans at lower rates. But since the president's public support is of extremely dubious value in the GOP-controlled House, this idea is probably going nowhere.
Student loans have an overrated effect on the overall economy, but there is little doubt that fresh debt warps the choices of young college grads, pushing some away from homes and cars. Even worse, the high cost of college warps the choices of wannabe students, pushing some to drop out of college, or skip it altogether, a highly questionable choice for most young people considering that college graduates earn more, work more, and are happier with their lives.