"Despite the administration's rhetoric, this plan will not create a single job, strengthen our economy, or promote fiscal responsibility," he continued. "What this plan will do instead is encourage more borrowing across the board. That means more debt for students, more debt for taxpayers, and more red ink on the government's books."
Congress in 2007 passed legislation lowering the maximum required payment on student loans from 15 percent of student's income annually to 10 percent. This new Obama initiative, part of the "We Can't Wait" push to circumvent GOP opposition in Congress, simply accelerates that cap to make it more immediate, putting it into effect in 2012, instead of 2014. The 10 percent cap was included in the College Cost Reduction Act of 2007. While Kline voted against that bill, it split the GOP caucus with 77 voting in favor and 97 voting against.
In addition, the White House is changing rules to forgive any remaining debt after 20 years, instead of 25, and estimates that 1.6 million borrowers could be affected. His plan also allows borrowers to consolidate their loans into one, which would carry an interest rate of a half percentage point less than before.
Speaking at the University of Colorado-Denver, Obama told the audience that he and Michelle owed more than $120,000 in law school debt, which took nearly a decade to pay off.
"I've been in your shoes. We did not come from a wealthy family," Obama told the cheering crowd.
It's never been more expensive to get a college education than right now -- and it's never been so important, Obama said.
"Our economy needs it right now and your future could use a boost right now," Obama said.
Aside from mortgages, student loans are the No. 2 source of household debt, according to a new report on tuition costs from the College Board. In recent weeks, Occupy Wall Street protesters have made cutting the costs of a college education one of their rallying cries.