President Obama caps student loan payments

President Obama signed a Memorandum in order to reduce the burden of student loan debt in the East Room of the White House on June 9, 2014.

By Clifton Andrews

Earlier this year, President Obama stated in his 2014 State of the Union that 2014 would be a “year of action” to ensure opportunity for all Americans. One such action that has been a center for both relief and controversy has been the Presidential Memorandum on student loans.

President Barack Obama officially signed the Presidential Memorandum to help struggling federal student loan borrowers manage their debt, on June 9, 2014. The Memorandum itself presents several executive actions that will help cap student loan payments by 10 percent of their monthly income.

This memorandum comes as a relief to the 71 percent of graduates who graduate with bachelor’s degrees and an average of $29,400 in debt. Therefore, this would decrease the minimum amount of money that borrowers would have to pay. In other words, those who cannot afford payments of more than 10 percent of their monthly income would no longer have to, relieving them financially.

However, those who can afford to pay would still be allowed to, showing that the memorandum was truly made to help the 71 percent that are struggling with their debt without hurting the 29 percent that are not.

This memorandum also comes as a relief to both potential college students and graduates. Potential college students would able to apply freely without the fear of a huge college debt looming over them after they graduate. At the same time, potential college graduates would be able to study without the constant pressure to graduate into a high paying job, in order to avoid transitioning into massive debt. This would basically increase the affordability of college altogether and allow more people to attend college without financial fear or restriction.

However, this Presidential Memorandum still has a long way to go before it actually helps anyone. While the Memorandum is an official government document, it is not an official law capping student loan payments. Since the Memorandum is a series of executive actions that will be taken by the Secretary of Education, there is no guarantee that the memorandum will accomplish its goal. Even if the Secretary does all of the actions in the memorandum, there is no guarantee that these actions will automatically have the intended result.

There is actually a fair chance that Congress may not allow the Memorandum at all. Since the President used his executive authority in the Memorandum without the approval of Congress, Congress may decide to repeal the Memorandum or any of the actions in it. In addition, one of the executive actions the Secretary of Education must complete is to propose official regulations that would allow additional students who borrowed federal loans to cap their payments at 10 percent of their income. However, Congress may vote against the regulations that are proposed since the president has used his executive authority to go over their heads.

This makes the memorandum a controversial document as it almost bypasses the government’s system of checks and balances; it’s no wonder why Congress would be against it.

So while the principle of the Presidential Memorandum may provide considerable relief for millions of Americans, its actual practice may prove risky and controversial with or without its success.

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