Pay As You Earn: Obama's Plan to Ease Student Loan Pain

The president hopes to ease economic burden.

We Feel Your Pain - On June 9, President Obama used his executive authority to ease the economic burden for student-loan borrowers, millions of whom are struggling with repayment. He also backed a bill introduced by Massachusetts Sen. Elizabeth Warren that would enable borrowers to refinance their loans. "I'm only here because this country gave me a chance through education," Obama said. "We are here today because we believe that in America, no hard-working young person should be priced out of a higher education." (Photo: Alex Wong/Getty Images)

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We Feel Your Pain - On June 9, President Obama used his executive authority to ease the economic burden for student-loan borrowers, millions of whom are struggling with repayment. He also backed a bill introduced by Massachusetts Sen. Elizabeth Warren that would enable borrowers to refinance their loans. "I'm only here because this country gave me a chance through education," Obama said. "We are here today because we believe that in America, no hard-working young person should be priced out of a higher education." (Photo: Alex Wong/Getty Images)

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The Challenge - Millions of students in the United States are facing more than a trillion dollars in loan debt racked up to finance their educations. In today's job market, it's easy to fall behind, which can hurt their efforts to open a bank account or cost them job offers because of damaged credit ratings. (Photo: Ruslan Dashinsky/Getty Images)

The Ten Percent Solution - Obama has proposed to expand the plan that caps loan payments at 10 percent of borrowers' monthly income to include as many as five million who borrowed before October 2007 or not since October 2011. It would go into effect by December 2015. (Photo: Mandel Ngan/AFP/Getty Images)

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The Ten Percent Solution - Obama has proposed to expand the plan that caps loan payments at 10 percent of borrowers' monthly income to include as many as five million who borrowed before October 2007 or not since October 2011. It would go into effect by December 2015. (Photo: Mandel Ngan/AFP/Getty Images)

Military Matters - Student loan interest rates for people serving in the military are capped at 6 percent, but some active-duty service members are unaware of the lower rate. The Education Department will now reduce the interest rates automatically for eligible service members, eliminating additional paperwork. (Photo: Scott Olson/Getty Images)

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Military Matters - Student loan interest rates for people serving in the military are capped at 6 percent, but some active-duty service members are unaware of the lower rate. The Education Department will now reduce the interest rates automatically for eligible service members, eliminating additional paperwork. (Photo: Scott Olson/Getty Images)

Taxing Issues - H&R Block will join Intuit, Inc. in working with the government to inform borrowers about federal student loan repayment options during the tax-filing process. The administration also will take steps to educate students and their families about education tax benefits, such as the $2,500 American Opportunity Tax Credit. (Photo: H& R Block, Intuit)

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Taxing Issues - H&R Block will join Intuit, Inc. in working with the government to inform borrowers about federal student loan repayment options during the tax-filing process. The administration also will take steps to educate students and their families about education tax benefits, such as the $2,500 American Opportunity Tax Credit. (Photo: H& R Block, Intuit)

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A Helping Hand - The Education Department will redouble efforts to identify borrowers who are struggling to manage their payments and provide them with information that can help them avoid or get out of default. They include individuals who've dropped out of college, missed their first loan payment or defaulted on low balance loans. (Photo: Saul Loeb/AFP/Getty Images)

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A Helping Hand - The Education Department will redouble efforts to identify borrowers who are struggling to manage their payments and provide them with information that can help them avoid or get out of default. They include individuals who've dropped out of college, missed their first loan payment or defaulted on low balance loans. (Photo: Saul Loeb/AFP/Getty Images)

A No Brainer - In June, the Senate considered legislation proposed by Sen. Elizabeth Warren that would allow students to refinance their loans at today's lower interest rates. It would be paid for by mandating a minimum 30 percent tax rate for individuals who earn $1 million or more."It would be scandalous if we allowed those kinds of tax loopholes for the very, very fortunate to survive while students are having trouble just getting started in their lives," Obama said. "And I want Americans to pay attention to see where their lawmakers' priorities lie here. Lower tax bills for millionaires or lower student loan bills for the middle class. This should be a no-brainer." (Photo: Jacquelyn Martin/AP Photo)

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A No Brainer - In June, the Senate considered legislation proposed by Sen. Elizabeth Warren that would allow students to refinance their loans at today's lower interest rates. It would be paid for by mandating a minimum 30 percent tax rate for individuals who earn $1 million or more."It would be scandalous if we allowed those kinds of tax loopholes for the very, very fortunate to survive while students are having trouble just getting started in their lives," Obama said. "And I want Americans to pay attention to see where their lawmakers' priorities lie here. Lower tax bills for millionaires or lower student loan bills for the middle class. This should be a no-brainer." (Photo: Jacquelyn Martin/AP Photo)