By Kelly Harkness -
Using his pen again in “this year of action,” President Obama today signed an executive order to ease the burden of student debt at the expense of “millionaires.”
The program, “Pay as You Earn,” expands an existing federal loan option available to undergrad and graduate students. It issues caps on monthly loan payments at 10 percent of the borrower’s discretionary income and forgives their remaining balance after 20 years.
For those working in public service or the government, any remaining debt is forgiven after 10 years. An estimated 5 million more borrowers will become eligible under the new plan. Before today, only those who took out loans after 2007 were entitled to “Pay as You Earn” benefits.
To finance the program, Obama proposed closing “tax loopholes” for the wealthy, or what he called “millionaires.”
“This should be a no-brainer,” he said today at the White House. “It would be scandalous if we allowed those kinds of tax loopholes for the very, very fortunate to survive while students are having trouble just getting started in their lives.”
House Speaker John Boehner responded with a statement saying, “Today’s much-hyped loophole closure does nothing to reduce the cost of pursuing a 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.”
Obama’s decision to bypass Congress with an executive order snubs Senate Republicans, who are debating alternative approaches they believe would address the fundamental causes of rising tuition costs.
Instead of addressing the root of the problem, the senators argue, granting more students access to federal education subsidies gives colleges and universities the green light to continue raising tuition costs.