President Obama plans to announce today a two-pronged executive action to relief Americans' ever-growing student-loan burden. According to The New York Times, the president will "use his executive authority to expand the existing income-based repayment program with a 'Pay as You Earn' option that would allow graduates to pay 10 percent of their discretionary income for 20 years and have the rest of their federal student loan debt forgiven." That's a bit better than low-income students' current situation, under which they "must pay 15 percent of their discretionary income for 25 years before having their debt forgiven." The second part of Obama's initiative "would allow the estimated 5.8 million people who hold both direct government student loans and government-backed private loans to consolidate their debts into one government loan"--getting borrowers an up to 0.5 percent reduction in their interest rate, The Wall Street Journal reports. The Journal notes that today is "the third day in a row Mr. Obama has announced an executive action aimed at bypassing Congress" meant to "jolt the economy." According to The Times more than 30,000 have petitioned the president for student-loan relief. Last week the Federal Reserve reported that Americans now owe more than $1 trillion in student loans, which has exceeded credit card debt for the first time.
This article is from the archive of our partner The Wire.