Before signing the order, Obama spoke to the media and insisted it needed to be done, pointing to the $1.2 trillion debt currently incurred by Americans using federal student loans.
In a 21st century economy, a higher education is the single best investment that you can make in yourselves and your future, and weve got to make sure that investment pays off, Obama said. And heres why: For 51 months in a row, our businesses have created new jobs -- 9.4 million new jobs in total. And over the last year, weve averaged around 200,000 new jobs every month. Thats the good news. But while those at the top are doing better than ever, average wages have barely budged. And there are too many Americans out there that are working harder and harder just to get by.
Obama also insisted that rising higher ed costs are hurting middle class America. At a time when higher education has never been more important, its also never been more expensive, Obama said. Over the last three decades, the average tuition at a public university has more than tripled. At the same time, the typical familys income has gone up just 16 percent.
Noting that he and the first lady relied on student loans for their education, Obama said his administration was trying to make colleges more accountable and accessible, though he added debt remained a major problem.
Despite everything were doing, were still seeing too big a debt load on too many young people, Obama said. A large majority of todays college seniors have taken out loans to pay for school. The average borrower at a four-year college owes nearly $30,000 by graduation day. Americans now owe more on student loans than they do on credit cards. And the outrage here is that theyre just doing what theyve been told theyre supposed to do. I cant tell you how many letters I get from people who say I did everything I was supposed to and now Im finding myself in a situation where Ive got debts I cant pay off, and I want to pay them off, and Im working really hard, but I just cant make ends meet. If somebody plays by the rules, they shouldnt be punished for it.
Obama authorized U.S. Education Secretary Arne Duncan to include more Americans under the Pay as You Earn program capping student loan repayments to 10 percent of their income. Obama also called on the federal government to renegotiate contracts with private companies like Sallie Mae that service our student loans" and working with more nonprofit groups and businesses to expand access to information about student loan options.
Taking aim at far-right Republicans in Congress who are backing a trickle-down economic plan, Obama urged the passage of U.S. Sen. Elizabeth Warrens, D-Mass., student loan reform bill which is up for a Senate vote on Wednesday.
But Republicans, including a potential presidential candidate from Florida, fired back after Obamas actions. U.S. Sen. Marco Rubio, R-Fla., said he had concerns about Obamas actions and pointed toward a plan he was crafting with U.S. Sen. Mark Warner, D-Va.
President Obama has correctly identified burdensome student debt as one of the greatest threats facing our economy, Rubio said. The ever-growing cost of college and skyrocketing student debt means that millions of young Americans will have a harder time achieving the American dream. The solution is to dramatically expand how Americans can access higher education and allow for new ways to pay for it.
The presidents proposal to expand the existing income-based repayment program may be welcome news for young Americans struggling with the cost of student loan debt, Rubio added. However, it builds on a system that is already too complicated and hard to access. Moving forward, a better approach is the bipartisan proposal I am drafting with Sen. Mark Warner. It would end the confusion and hassle by automatically enrolling students into one unified income-based repayment plan. Our plan will be more fiscally responsible for both taxpayers and students than what the president has done unilaterally. Rather than simply taking executive action, I urge the White House to look at our bipartisan plan.
Rubio also dismissed Warrens proposal. The president is also calling for the Senate to pass Sen. Elizabeth Warrens student loan legislation, which does nothing to address the growing costs of higher education and puts taxpayers on the hook for billions of dollars of existing loan debt," Rubio said. During this weeks Senate debate, l look forward to offering alternative, higher education reform ideas that will make higher education more affordable and accessible for young Americans.
But the proposal did win the applause of the Florida congresswoman who leads the Democratic National Committee (DNC). President Obama announced key actions to help millions of people who have borrowed to pay for their college education better manage their debt, U.S. Rep. Debbie Wasserman Schultz, D-Fla., insisted on Monday.
Reach Kevin Derby at email@example.com.