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Franken commends Obama student debt proposal, advocates point out limitations

President Barack Obama announced Wednesday that he plans to use an executive order to ease student loan debt for millions of Americans. The move was heralded by Sen. Al Franken, but some advocates for students said it was too limited.

Our sister site, the Colorado Independent, reported that Obama was in full campaign mode as he told a Denver crowd that he intends to relieve economic distress without going through the gridlocked Congress.

Obama’s plan is for speeding up student loan repayment reforms passed last year but wasn’t scheduled to take effect until 2014. His executive order will lower the maximum percentage of income students will have to pay toward their student loans to 10 percent. After 20 years, the remaining debt will be forgiven. There is also a loan consolidation component to the plan.

The plan would help 1.6 million borrowers reduce their monthly payments, according to the White House. Another 5.8 million could benefit from the loan consolidation program. But the conditions of the plan are restricted. The Education Finance Council told Reuters that they were disappointed by the limited scope of the proposal.

“President Obama’s proposal, available to a limited group of students for a limited amount of time, does not address the real student loan problem: rising tuition and the lack of well-paying jobs,” a statement from Education Finance Council said.

Student advocacy groups told the Chronicle of Higher Education that they were thankful, considering the gridlocked political scene, for the new measures.

“The president is doing what he can with a paralyzed Congress,” said Richard T. Williams, a lobbyist with the U.S. Public Interest Research Group. “It might be a limp when we need a leap, but we need Congress to provide that leap.”

Sen. Al Franken commended the President on the proposal.

“I’ve traveled around Minnesota and have heard how much families are struggling to make ends meet, and I’m glad the president recognizes that people need this kind of relief now,” Franken said in a statement. “The cost of a college education shouldn’t bankrupt a family, and with our struggling economy, these reforms couldn’t come at a better time.”

U.S. Student loan debt has recently overtaken credit card debt. There is roughly $1 trillion in outstanding loans and this year’s crop of university graduates holds the highest average debt to date, the Colorado Independent reported.

Obama also touched on the economic impact of student loan debt.

“Other countries are hustling to out-educate us so they can out-compete us tomorrow. They want the jobs of the future. I want you to have those jobs. I want Americans to have those jobs. I want us to win the future. That means we should be doing everything we can to put a college education within reach for every American,” Obama said. “It’s never been more important, but let’s face it, it’s also never been more expensive.”

The president spoke about the debt he and his wife Michelle racked up as students. He said together they owed in excess of $100,000 in student loans when they married.

“We combined liabilities, not assets,” he joked.

John Tomasic contributed to this report.

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