Google Plus Facebook LinkedIn Twitter Vimeo RSS

Student loans as campaign politics

By , - Last modified: October 27, 2011 at 11:39 AM

In January 2012, you will be eligible to consolidate your guaranteed or direct student loan into one, low-interest payment.

President Barack Obama on Tuesday issued an an executive order for an accelerated discounted borrower program to help the millions of students who struggle to pay monthly student loans, thereby avoiding default. This so-called “pay as you earn” program could lower borrower repayments by as much as a couple hundred dollars a month with all remaining debt on the federal loans forgiven after 20 years. The program will neither require higher taxes nor would it be added as an expense to the annual federal budget deficit.

Student loan reform was passed by Congress in March. In that measure, repayments would be capped at 10 percent of the borrower’s personal disposable income starting in January 2014.

Obama’s Oct. 26 executive order moves that date up to January 2012, 10 months before the presidential election.

Given that the $447 billion American Jobs bill is stalled in Congress, the additional round of student loan reform is the third unilateral executive effort taken by Obama just this week. Using the phrase “we can’t wait,” Obama issued executive orders to aid underwater homeowners to repay their mortgages and to force community health centers to employ up to 8,000 military veterans.

Obama’s executive order to speed up student loan reform is part of a broader re-election strategy. His most important political goal is to energize a core base of voter support within the Democratic Party: students and younger voters between 18 and 29. Another goal is to target what he calls a "dysfunctional Congress" that, according to the White House, has done little to improve the 9.1 percent unemployment rate.

Do these executive actions constitute good policy by helping borrowers navigate a tough global marketplace? Or does Obama simply have re-election in mind?

Chris Dolan is an assistant professor of political science at Lebanon Valley College ( and the author of “Striking First,” “In War We Trust” and “The Presidency and Economic Policy.”

More From This Industry

Write to the Editorial Department at

Leave a Comment


Please note: All comments will be reviewed and may take up to 24 hours to appear on the site.

Post Comment
View Comment Policy