President Obama signs order to expand cap on federal student loan payments
Related mediaVIDEO: Pres. Obama on student loan repayment
FARMINGDALE - President Barack Obama signed a presidential memorandum today that aims to help former college students and graduates who are struggling to repay their tuition debt.
The measure will cap federal student loan payments at 10 percent of a borrower's monthly income. The cap was already in place for people who took out loans since the fall of 2007, but the memorandum extends the 10 percent limit to an estimated 5 million people who took out loans prior to that year, making the cap fully retroactive.
The change will take effect in December of next year.
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In his statements about the executive order, Obama said the average tuition at a public university has more than tripled over the last three decades, while the typical family's income has gone up just 16 percent.
The president says he also wants to allow people with federal loans to refinance at a lower interest rate. The Senate is expected to debate the legislation next week, but it faces opposition from Republicans who say it would add too much to the nation's debt.