WASHINGTON (6/10/14)--President Barack Obama signed an executive order Monday allowing borrowers to limit repayment of federal student loans to 10% of their monthly incomes, according to a report from the Associated Press. The order will take effect in December 2015 and will affect approximately five million borrowers.
In his weekly video address Saturday, Obama touted the benefits of a college education, citing statisticsthat say the unemployment rate of college graduates is about half of those who have graduated high school, while graduates of a four-year college earn on average $15,000 more per year than someone with just a high school diploma.
"Over the past three decades, the average tuition at a public four-year college has more than tripled. The average undergraduate student who borrows for college now graduates owing almost $30,000," he said.
Obama also directed the Departments of Education and the Treasury Monday to work together to help borrowers manage student debt in several ways:
Obama announced a similar plan with a 10% cap in 2010, but only for those who started borrowing after October 2007.