Obama pressures Republicans to pass student loan bill

President Obama slammed congressional Republicans Monday to for refusing to close tax loopholes for the wealthy as a way to pay for initiatives like lowering student loan interest rates and increasing the minimum wage.

"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," the president said during a White House speech aimed at unveiling ways to ease the burden of student loans. "If you're a big oil company they'll go to bat for you. If you're a student, good luck. Some of these Republicans in Congress seem to believe that just because some of the young people behind me need some help, that they're not trying hard enough."

Sen. Elizabeth Warren, D-Mass., has authored a bill that would close certain tax loopholes to raise revenue for helping Americans refinance their outstanding loans at lower rates. In addition to taking certain executive actions to cap monthly loan payments and expanding education about repayment programs, the White House is pushing Congress to pass that bill when it comes up for a vote this week.

The president lambasted lawmakers who "pay lip service to the next generation and then abandon them when it counts" but also urged voters to pay attention to the vote this week to determine "who it is that's fighting for you and your kids and who it is that's not."

"If there are no consequences then this kind of irresponsible behavior continues on the part of members of Congress," he said.

Republicans say the proposals do nothing to solve the root of the problem.

"Today's announcement 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," House Speaker John Boehner, R-Ohio, said in a statement.

At the event, the president signed an executive order directing the Education Department to expand the "Pay As You Earn" program that caps the amount borrowers have to pay in loan payments at 10 percent of their monthly income. The expansion of the program - which is not currently available to those who started borrowing before October 2007 or have not borrowed since October 2011 -- will help five million people, the administration says. The new plan should be available by December 2015.

A Congressional Budget Office (CBO) report released last week estimated there are about $1 trillion in outstanding federal student loans or loan guarantees, and more than $100 billion in outstanding private student loans (that are not federally guaranteed).

Other administration incentives include renegotiating contracts with federal loan servicers to strengthen the incentives that encourage borrowers to repay their loans on time and lower payments for those who enter into delinquency of default, taking steps to automatically reduce interest rates for eligible active-duty service members, and working with private tax preparers Intuit, Inc., and H&R Block to better communicate information abut the federal loan repayment options.

Other initiatives are aimed at making borrowers more aware of various flexible repayment programs that already exist and strengthening loan counseling.

"I'm only here because this country gave me a chance through education. We are here today because we believe that here in America, no hardworking young person should be priced out of a college education," the president said.

The White House has billed the student loan initiatives as one of the areas where the president is taking more aggressive executive action in lieu of waiting for Congress to pass legislation. He is simultaneously advocating for passage of Warren's bill.

A typical student would save about $2,000 over the life of his or her loans by being able to refinance at lower rates, the administration estimates.

The CBO report put the cost of Warren's bill at $51 billion from 2015 to 2024, while bringing in $72 billion in revenues from a new minimum tax on people with

Education Secretary Arne Duncan, who briefed reporters about the initiative Monday, said that the administration does not yet know the cost of the executive branch initiatives. He said, "We think this is something that will be fantastic for the economy" by freeing up income for borrowers to purchase houses and cars or start businesses.

President Obama has tried to make college affordability a top priority during his presidency. After his 2014 State of the Union address the White House hosted a summit for colleges, universities and non-profit organizations who had taken voluntary steps to increase college access for low-income students.

On Tuesday, Mr. Obama will conduct a live Q&A session on Tumblr to answer questions about student loans.