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Obama Endorses Sen. Warren’s Student Loan Refinancing Bill

BOSTON — Massachusetts U.S. Sen. Elizabeth Warren on Monday applauded President Obama for signing an executive order that will alleviate the burden of soaring college debt for millions of Americans.

“He is taking the steps he can take through executive action,” Warren said.

But the Massachusetts Democrat also insisted more reform is needed.

President Obama signed an executive order Monday that aims to reduce the burden of student loan debt. (Pablo Martinez Monsivais/AP)

President Obama signed an executive order Monday that aims to reduce the burden of student loan debt. (Pablo Martinez Monsivais/AP)

“He’s doing good things on loan servicing, but those are all first steps,” she said. “We still have to deal with over $1.2 trillion in outstanding student loan debt. Have to deal with the high interest rates. The president can’t do that alone. That’s going to require action by Congress.”

Obama’s plan expands a program called Pay As You Earn that caps loan repayments at 10 percent of monthly income. It is estimated his change will help an additional 5 million borrowers.

In announcing his new initiative, the president urged action from Congress, praising Warren and Massachusetts U.S. Rep. John Tierney for introducing legislation that would allow people with existing loans to refinance at lower rates. The legislation includes a new minimum tax for individuals with adjusted gross incomes between $1 million and $2 million.

“[The bill] pays for itself by closing a loophole that allows some millionaires to pay a lower tax rate than middle class families,” the president said.

According to the Congressional Budget Office, the bill would increase costs in the short term, but increase revenues by a wider margin in the long run.

Congress is expected to vote on the legislation later this week, though it’s unlikely the bill will gain enough support to pass the Republican-dominated House.

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  • Ed McKinley

    This proposal literally excludes at least half of ALL student loan borrowers from any kind of assistance whatsoever. This includes, by far, the vast majority of “older loans” Warren makes it sound like she is helping. Of the remaining borrowers, there is no known research or data to support any meaningful savings whatsoever. I am very comfortable in saying that I can see NO way more than 20% of ALL student borrowers can even imagine receiving the kind of savings Warren rants about. READ THE BILL. I did.
    Moreover, this bill ensures that the 35 % of loans and default and the estimated 20% more that are delinquent continue to ensure an astonishing income stream for big companies like Sallie Mae who earn enormous profits on defaulted and delinquent loans.

    I am NOT opposed to lowering interest rates on anything. I am against using it as a means of one bolstering their political position at the expense of millions of Americans who are suffering under a lending system that has been stripped of RIGHTS afforded all other government and consumer credit.

    I am disgusted at legislation that implies it will lower the cost of college for middle class Americans who are being “hammered” by….the increasing cost of college. If you are pushing a bill that MIGHT save a small percentage a little money on FINANCING their exorbitant college costs, then that’s what you should say you are doing.

    Senator Warren and Congressman Tierney have taken a very wrong minded direction on what could actually be a defining issue in America’s future. ( We’ve been saying $1.2 trillion in outstanding loan debt for quite a while ). Moreover they have turned the screws on over 20 million of the most exploited borrowers and all Americans with an obviously false claim of lowering college cost.

    Lower interest rates increase inflation. Economics 101. College costs will continue to rise for all. The borrowers continue to be exploited. The big winners ? Democrats hope to stake a claim to the majority on this deceit. Oh…I almost forgot….the servicing GIANTS like , Sallie Mae continue their path of destruction like overcharging service members and….the servicing fee’s they get for loans that do finance ??? BONUS !!!!!

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