President Barack Obama waves to the media as he returns at dusk on the South Lawn of the White House in Washington, Friday, June 6, 2014, after attending remembrance activities on the 70th anniversary of D-Day in Normandy, France. (AP Photo/Jacquelyn Martin)

Obama to take executive steps on student loans

More Photos

See all photos

WASHINGTON (AP) -- President Barack Obama is prepping new executive steps to help Americans struggling to pay off their student debt, and throwing his support behind Senate Democratic legislation with a similar goal but potentially a much more profound impact.

Obama on Monday will announce he's expanding his "Pay As You Earn" program that lets borrowers pay no more than 10 percent of their monthly income in loan payments, the White House said. Currently, the program is only available to those who started borrowing after October 2007 and kept borrowing after October 2011. Obama plans to start allowing those who borrowed earlier to participate, potentially extending the benefit to millions more borrowers.

"At a time when college has never been more important, it's also never been more expensive," Obama said in his weekly radio and Internet address released Saturday.

Obama also plans to announce he's directing the government to renegotiate contracts with federal student loan servicers to encourage them to make it easier for borrowers to avoid defaulting on their loans. And he will ask the Treasury and Education departments to work with major tax preparers, including H&R Block and the makers of TurboTax, to increase awareness about tuition tax credits and flexible repayment options available to borrowers.

At the same time, Obama will use the Rose Garden appearance on Monday to amplify his call for lawmakers to pass more sweeping legislation that would let college graduates with heavy debts refinance their loans. The Senate is expected to debate the legislation next week, but it faces significant obstacles.

The dual strategy -- taking executive action while urging Congress to finish the job -- has become Obama's signature playbook this year. Stymied by gridlock as Congress marches toward the midterm elections, he has repeatedly sought ways to go around Congress with modest steps that underscore his pitch from the bully pulpit for Congress to finish the job.

"While Congress decides what it's going to do, I will keep doing whatever I can without Congress to help responsible young people pay off their loans," Obama said.

Echoing Obama's call to action on student loan debt are Education Secretary Arne Duncan and Jill Biden, the wife of Vice President Joe Biden, who planned to join Obama for the White House event on Monday. The president will continue the push Tuesday in an online question-and-answer session hosted by Tumblr.

Under an income-based repayment plan created by Congress, the maximum monthly payment is already set to drop from 15 percent of income to 10 percent in July 2014. Obama's executive action eliminates that waiting period so borrowers can take advantage of lower payments sooner.

In his weekly address, Obama noted that the Senate proposal, spearheaded by Sen. Elizabeth Warren, D-Mass., would be paid for by doing away with tax loopholes for millionaires. He said the choice facing lawmakers is whether to "protect young people from crushing debt or protect tax breaks for millionaires."

Senate Republican leader Mitch McConnell of Kentucky in a statement criticized the Democratic bill for failing to address college costs.

"This bill doesn't make college more affordable, reduce the amount of money students will have to borrow, or do anything about the lack of jobs grads face in the Obama economy," he said.

___

Associated Press writer Jim Kuhnhenn contributed to this report.

___

Online:

Obama address: www.whitehouse.gov

GOP address: www.speaker.gov

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Top Stories

  • Beating the Blitz
    How Wilson to Willson helped beat the Cardinals' blitz

  • The Show Will Go On
    Dave Ross hopes that seeing "The Interview" won't become a litmus test for patriotism
ATTENTION COMMENTERS: We've changed our comments, but want to keep you in the conversation.
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.
comments powered by Disqus
Sign up for breaking news e-mail alerts from MyNorthwest.com
In the community
Do you know an exceptional citizen who has impacted and inspired others?
KIRO Radio and WSECU would like to recognize six oustanding citizens this year. Nominate them to be recognized and to receive a $2,000 charitable grant.