Here’s What Obama’s Hard Cap On Student Loan Payments Means For You

The Situation

Out of the 20 million students who go to college every year, 12 million of them borrow money to pay for college. All together, Federal Student Loan debt reached 1 trillion dollars in 2013. More and more people are going to college (yay!), and more and more people are going into debt trying to get a decent future (boo).

The Current Fix

President Obama is putting a cap on student loan repayments. Now, people with student loans will not be forced to pay back student loans that are more than 10% of their monthly income. There was already a law like this on the books, but it had many loopholes, the President intends to close those loopholes with this Executive Order. This law is set to take effect in December of 2015, and should help approximately 5 million borrowers.

Why That’s A Problem

President Obama is not passing a law to change this issue, he’s using an Executive Order. That essentially means that he doesn’t need the support of Congress to do so. It seems that President Obama has been making much use of the Executive Order recently, first he increased the Federal minimum wage to 10.10 (if you work for the government), then he brought Bowe Bergdahl home, and now this.

via Flickr Commons

Q&A: The Obama administration is the first President ever to use social media to the extent that he has. On Tuesday, June 10th at 4 pm, President Obama held a Question and Answer session on Tumblr, moderated by Tumblr founder David Karp. The President’s intent was to answer questions on his new Student Loan Executive Order, and on the Student Loan Process as a whole. Check it out? Thought Catalog Logo Mark

image – thisisbossi

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