President Obama speaks at the University of Nevada-Las Vegas. (Issac Brekken / Getty Images )
LAS VEGAS – President Obama announced a new effort to help people struggling to repay student loans, part of his ongoing campaign to push policies that grab young voters’ attention without having to go through Congress.
In a memorandum released Thursday, Obama instructed his administration to take steps to improve a student loan repayment plan, directing the Education Department to better advertise the program, streamline the application process and develop Web and mobile applications to ease access.
Obama discussed the changes to the Income-Based Repayment Plan in a speech at the University of Nevada-Las Vegas. The plan currently allows borrowers to cap their student loan payments at 15% of their discretionary income. That percentage is set to drop to 10% for some borrowers in 2014.
“I want more people to be able to make the investment you're making. I want to make it easier for more students, like you, to earn a degree without shouldering a mountain of debt,” Obama told the group, many of whom were not students but local supporters. “Because even though ... a college education is still a great investment, the burden of debt is serious, and it's hard on folks just as they're starting off in life.”
The president acknowledged that the changes would have little effect without more significant action to address the rising cost of higher education, but the White House views the issue as a political winner and a chance to turn up the volume on the student loan debate in Congress. Lawmakers must act before July 1 if they want to prevent some federal student loan rates from doubling. Democrats and Republicans have largely agreed to extend the lower rate, but are at loggerheads over how to pay for it.
"Get it done," Obama told Congress in his remarks.
The issue is a favorite one for Obama, who has used it to reach out to young voters – a critical part of his base – as he gears up his campaign. The focus on repayment plans speaks to a broader demographic. Nearly two-thirds of college graduates borrow to pay for college, with an average debt upon graduation of about $26,300, the White House said.
But the White House says too few borrowers are using the Income-Based Repayment Plan or are aware of the changes. Under the initiative announced Thursday, direct student loan borrowers will no longer have to contact their loan servicer as the first step in the application. The Education Department plans to develop Web tools and mobile applications to learn about various repayment plans available. Loan counseling for borrowers will also be improved, the White House said.