â€œIâ€™m only here because this country gave me a chance through education,â€ President Obama said at the White House on Tuesday, where he announced a new executive order his administration is taking to ease the burden of student loan debt on millions of Americans.
40 million Americans are saddled with student loan debt, 60 percent of whom are over age 30. The national student loan debt surpasses the amount of credit card debt and stands at nearly $1.2 trillion.
President Obama acknowledged these broad statistics while also sharing his personal connection to student loans. His grandfather, he said, used the GI Bill to finance his education, while his mother used grants to pay her way through school while also supporting her two children. It took President Obama just one year to pay off his undergraduate student loan debts, he said.
â€œAt a time when higher education has never been more important, itâ€™s also never been more expensive,â€ he said, before announcing three parts of an executive order designed to reduce the strain of student loan debt in America.
First, the Pay as You Earn (PAYE) program will be expanded, meaning approximately 5 million more Americans will qualify to have their student loan payments capped at 10 percent of their monthly income, effective in December 2015.
The President also announced his support for Senator Warrenâ€™s (D-MA) Bank on Students Emergency Loan Refinancing Act, which would allow people with student loans to refinance their interest rates to match the lower rates currently available. The bill â€œpays for itself,â€ he said.Â The lower interest rates on student loans would be offset by closing various tax loopholes.
â€œWeâ€™ll make it clear that these companies are in the business of helping students, not just collecting statements,â€ Obama said.
Finally, the President announced new partnerships with members of the private sector, like H&R Block, to find ways to increase awareness about different loan repayment programs.
President Obamaâ€™s executive order comes in the midst of a year in which he said he would use his â€œpen and phoneâ€ to take action if Congress continues to blocking progress.
Referring to some members of Congress, President Obama said, â€œIf youâ€™re a big oil company, theyâ€™ll go to bat for you. If youâ€™re a student, good luck.â€
President Obama described Warrenâ€™s bill, which is set to be voted on this week, as a â€œno-brainerâ€ and urged Americans to watch where their lawmakersâ€™ priorities lie.
â€œWho is it thatâ€™s fighting for you?,â€ Obama asked.
The announced executive order will also make it easier for veterans and servicemembers to receive the benefits for which they are eligible.
â€œIn a twenty-first century economy, higher education is the single best investment you can make,â€ Obama said. â€œA generation of young people canâ€™t wait for Congress to get going.â€