President Obama proposes student loan help
President Barack Obama says executive steps he'staking to help economically struggling Americans isn't the kind ofbold action needed from Congress, but he says what he's doing canhelp the economy.
Obama returned to Denver, where he accepted the Democraticpresidential nomination, to announce steps to help graduates torepay student loans.
The move to assist struggling graduates and students could helpObama shore up re-election support among young voters, an importantvoting bloc in his 2008 campaign, and appeal to their parents, too.Student loan debt also is a common concern among Occupy Wall Streetprotesters.
The loans have become particularly painful for many amid thenation's economic woes, high unemployment and soaring tuitioncosts. They are second only to mortgages as a portion of Americans'debt, coming in ahead of credit cards.
The White House said Obama will use his executive authority toprovide student loan relief in two ways.
First, he will accelerate a measure passed by Congress thatreduces the maximum required payment on student loans from 15percent of discretionary income annually to 10 percent. The WhiteHouse wants it to go into effect in 2012, instead of 2014. Inaddition, the White House says the remaining debt would be forgivenafter 20 years, instead of 25. About 1.6 million borrowers could beaffected.
Second, he will allow borrowers who have a loan from the FederalFamily Education Loan Program and a direct loan from the governmentto consolidate them into one loan. The consolidated loan wouldcarry an interest rate of up to a half percentage point less thanbefore. This could affect 5.8 million more borrowers.
With his $447 billion jobs bill blocked by Senate Republicans,Obama is looking for things he can do on his own to prime theeconomy. He said he has asked his advisers to keep looking for moresteps he can take. Denver was the final stop on Obama's three-dayWest Coast swing.