When President Obama touted his two-pronged student debt relief measure before thousands of students Wednesday at the Auraria Higher Education Campus in downtown Denver, he got rounds of applause.
Policy analysts, however, cautioned that implementation of the “Pay-As-You-Earn” part of the measure is potentially problematic. They also note that not all borrowers are going to be able to benefit from the measures, and, of those who are eligible, not all of them should pursue the relief being offered.
Those were just some of the caveats offered amid the hype over the president’s proposed measures to ease the burden of monthly student loan payments for multitudes of students.
“It’s hard to figure out how this will work because it’s dependent on students themselves and the circumstance they’re in,” said Alisa Cunningham, Vice President of Research and Programs at the Institute for Higher Education Policy (IHEP).
President Obama on Wednesday said that his administration would “speed up” an income-based repayment (IBR) provision of a law the administration already got passed by Congress that would permit borrowers to cap their student loan payments at 10 percent of discretionary income—down from 15 percent as it is currently. Originally, the lower repayment option was supposed to take effect July 1, 2014.
“We’re going to make these changes work for students who are in college right now,” Obama said to applause in his Denver speech. “We’re going to put them into effect next year, because our economy needs it right now and your future could use a boost right now.”
“Because of this change,” President Obama continued, “about 1.6 million Americans could see their payments go down by hundreds of dollars a month—and that includes some of the students who are here today.”
