June 9 - President Barack Obama issues an executive action aimed at making it easier for young people to avoid trouble repaying student loans. Mana Rabiee reports.
President Obama issued an executive action on Monday designed to make it easier for young people to repay their student loans. He signed an order directing Education Secretary Arne Duncan to make sure more people who borrow federal students loans can CAP their debt repayments at just 10 percent of their monthly income. U.S. PRESIDENT BARACK OBAMA SAYING: "We call it 'Pay as you Earn'. We know it works because we've already offered it to millions of young people." Federal law already allows most students to cap their loan payments to 10 percent of their income. Monday's order increases the number of eligible students by some 5 million, the Administration said. U.S. PRESIDENT BARACK OBAMA SAYING: "We want young people to be in a position to pursue their dreams. We want more young people who act responsibly to be able to manage their debt over time." The White House says 'Pay as you Earn' will help stimulate the economy, by helping young people avoid those pesky credit blemishes, it said, that can hurt them down the road. Monday's executive action doesn't go into effect, however, until the end of 2015. Senate Democrats have proposed related legislation that would let Americans refinance their student debt at lower interest rates. But Republicans oppose the idea, saying the cost would be too high to the government.