By using his executive authority to begin smaller-scale initiatives, Obama hopes to show that he is taking action during the economic crisis while Congress dithers.
Republicans in both chambers quickly denounced his decision to bypass them, underscoring the partisan division that has left Washington in political gridlock.
“Sadly, the president has once again chosen to put politics before policy, touting a plan that will do nothing to help the nation’s unemployed workers,” said Rep. John Kline (R-Minn.), chairman of the House Committee on Education and the Workforce. “What this plan will do instead is encourage more borrowing across the board. That means more debt for students, more debt for taxpayers and more red ink on the government’s books.”
But the president is counting on his initiative to gain broad populist support, even though its scope will be limited.
Of the estimated 36 million people who are paying off student loans, just 450,000 are enrolled in a program, started in 2007, that allows borrowers to limit their repayments to 15 percent of discretionary income. Congress approved legislation to reduce that cap to 10 percent in 2014, and Obama’s plan accelerates the program launch to January.
Education experts said the program has been poorly publicized. The White House expects more people to enroll after the president’s high-profile announcement.
The Occupy Wall Street protesters in cities across the nation have cited rising student debt as one of the pillars of their reform movement. And administration officials said Obama’s announcement was spurred in part by a petition on the White House Web site, signed by 30,000 people, that calls for student loan relief.
Obama’s plan could provide savings that are “in some cases hundreds of dollars a month, which is real money in any economy, especially today’s economy,” said Pauline Abernathy, vice president of the Institute for College Access & Success. “They are real savings and will make a difference in people’s lives.”
Those interested in learning more about the new programs can call 1-800-4FEDAID or go to www.studentaid.ed.gov.
Wilson reported from Denver. Staff writer Daniel de Vise contributed to this report.
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