President Obama on Wednesday announced a plan to offer relief to millions of young people struggling to repay federal student loans. The new rules will let borrowers cap monthly payments on federal loans (but not private loans) at 10 percent of their discretionary income. Obama said the move would "make a difference," even if it isn't the sort of sweeping economic change America needs. Congress actually already approved this measure last year, eyeing a 2014 roll-out. Obama plans to use an executive order to implement the new rules in 2012. Will this really help struggling graduates?
The savings are negligible: The president's plan "sounds wonderful," says Matt Kiebus at Death and Taxes, "but even if those eligible take advantage, the savings are pretty modest." (Just a few dollars a month, by some estimates.) Besides, people with federal student loans would have received the same relief in 2014, anyway. This is "not nearly enough" to make a significant difference.
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