President Obama on Monday signed an executive order that lets millions of college graduates cap their student loan payments at 10% of their income, a move he says will help “open the doors of opportunity for all.”
By amending student loan regulations to put the cap in place, Obama is making use of his executive powers to help alleviate the burden for young Americans increasingly saddled with student loans.
“Everything I do is aimed toward reversing those trends that put a greater burden on the middle class and are diminishing the number of ladders to get into the middle class,” Obama told a crowd gathered in the East Room of the White House for the formal announcement.
“In America, higher education opens the doors of opportunity for all,” he said. Some higher education and additional skills are going to be your surest path to the middle class.”
Under Monday’s order, the new cap would be available by December 2015. Administration officials said they would not know how much it would cost until they’ve gone through the regulatory process.
Even so, Republican House Speaker John A. Boehner of Ohio dismissed the executive action as a “much-hyped loophole” and questioned whether it would do anything to reduce the cost of higher education or improve access to federal student loans.
“Nor will it help millions of recent graduates struggling to find jobs in the Obama economy,” he said Monday.
His criticism was echoed by other Republican leaders.
"College graduates don’t need a $1 a day subsidy to help pay a $27,000 loan. They need a good job," said Sen. Lamar Alexander (R-Tenn.) in remarks released Monday.
But with college costs rising every year and incomes lagging behind, aides to the president say he had to take the action that was within his power. The move was the latest in Obama’s “pen and phone” strategy to take administrative action to address issues that have been deadlocked in Congress.
As he announced it Monday, Obama recalled that it took him a while to pay off his law school loans but that lawyers usually have the means to retire their debt.
Many students saddled with debt are often in a more desperate situation, he said, leaving “middle-class families feeling trapped.”