In an effort to combat escalating college debt, President Barack Obama on Monday expanded a program that allows borrowers to cap their loan payments at 10 percent of their incomes.
The White House estimates that the plan could help an additional 5 million borrowers.
“At a time when higher education has never been more important, it’s also never been more expensive,” the president said at the White House.
The Obama administration declined to say how much the proposal would cost and how it would be paid for, though previous estimates put an expansion in the billions of dollars.
“We actually don’t know the costs yet,” Education Secretary Arne Duncan said. “We'll figure that out on the back end.”
Obama’s action Monday — using his executive power while also urging a divided Congress to do more — is part of a strategy he has pursued this year as Washington heads into the election season.
Republicans on Capitol Hill criticized the plan for not helping to lower the skyrocketing costs of college.
“Today’s much-hyped loophole closure does nothing to reduce the cost of pursuing a higher education or improve access to federal student loans — nor will it help millions of recent graduates struggling to find jobs in the Obama economy,” said House Speaker John Boehner, R-Ohio.
Obama’s original plan, announced in 2010, is available only for those who started borrowing after October 2007. The expansion will affect anyone who has borrowed in the past, though it won’t go into effect until December 2015.
The maximum monthly payment is already scheduled to drop from 15 percent to 10 percent in July as part of a different plan created by Congress, though that’s only for new borrowers.
He urged Congress to pass a Democrat-backed bill that would refinance most student loans to the interest rate Congress approved last summer for students beginning new loans. Standard undergraduate loans, for example, would be reduced from an average 6.8 percent rate to 3.86 percent under the bill.
The Senate will vote on the bill Wednesday.