President Barack Obama announced Wednesday steps aimed at making it easier for U.S. college students to pay off their education loans. In announcing the actions, the president pointed to a new report detailing the continuing rise in the cost of higher education in the United States.
In his remarks at the University of Colorado at Denver, the president used a personal example and some humor to illustrate the pressures that sharply rising education costs place on Americans.
The president recalled the burden that he and his wife Michelle struggled with in paying off about $120,000 in student loans after they graduated from law school.
"We combined and got poorer together. We combined our liabilities not our assets. So we were paying more on our student loans than we paid on our mortgage each month," he said.
Obama pointed to a new report from the College Board showing that the average tuition at private colleges in the United States went up by more than 4 percent - 8.3 percent at four-year public colleges - during the past year. That's faster than inflation and income growth.
One step the president announced will allow college graduates enrolled in an existing government program to pay back student loans at a maximum rate equal to 10 percent of their disposable income, rather than 15 percent, and be eligible for debt forgiveness on their remaining debt in 20 years instead of 25.
Another rule change would help students consolidate multiple loans into one federally-backed loan at a lower interest rate, allowing them to save more money.
Obama said this will potentially help 1.6 million students and graduates, provide students with more certainty, and help boost the economy.
"Because you will have some certainty, knowing that is only a certain percentage of your income that is going to pay off your student loans, that means you will be more confident and comfortable to buy a house or save for retirement. And that will give our economy a boost when it desperately needs it," said the president.
Secretary of Education Arne Duncan said the changes will help students and graduates in the current difficult economic environment.
"These are changes that will make a big difference in the lives of college students as well as recent graduates, who are entering one of the toughest job markets in recent memory," said Duncan.
But critics note that the changes will affect a fraction of those who have borrowed to pay for their education, will apply only to federal college loans, and that current borrowers would not be eligible for adjustments.
The changes are the third in a series of executive orders President Obama is issuing that are designed to bypass opposition by Republicans in Congress to his economic and jobs proposals.
"I intend to do everything in my power right now to act on behalf of the American people - with or without Congress," said Obama.
Earlier this week, President Obama announced a plan to make it easier for Americans with federally-backed mortgages to refinance their home loans and save money, and another to encourage businesses to hire returning military veterans.
Republican congressional leaders have responded to Obama's "we can't wait for Congress" campaign by accusing the Democratic-controlled U.S. Senate of blocking Republican bills they say would do more to help the economy.