NEW: Obama says his changes will help "millions of Americans"
Obama discusses two measures to help college graduates handle student loans
One of the measures would help grads consolidate loans and get a break on interest rates
The president is concluding a three-day, three-state western trip
President Barack Obama took his economic relief plan on the road to Colorado Wednesday, highlighting new measures designed to help college graduates manage student loan debt.
One of the president’s measures will push up the start date for more favorable terms on a special loan repayment program based on income. Another measure is designed to encourage graduates with two or more kinds of federal loans to consolidate them and get a small break on interest rates.
Obama discussed the two initiatives – part of a White House strategy to bypass a polarized, seemingly ineffectual Congress – during an appearance in Denver. The stop came at the end of a three-day presidential trip that also included stops in Nevada and California.
“These changes will make a difference for millions of Americans,” Obama told a college crowd. “We should be doing everything we can to put a college education within the reach of every American.”
The president also blasted Congress for failing to pass his larger $447 billion jobs bill, once again accusing Republicans of blocking his agenda for short-term partisan gain.
“It’s time to put country ahead of party,” he declared. “It’s time to put the next generation ahead of the next election.”
College education costs have continued to spike in recent years. The price of attending the average public university rose 5.4% for in-state students to $21,447 this fall, according to a report released Wednesday by the College Board. The cost for one year at a typical private college rose 4.3% to $42,224.
The average student loan debt for the graduating class of 2009 at four-year nonprofit colleges was $24,000, according to the Institute for College Access & Success.
While college costs are rising, employment prospects for new college graduates are dimming. In 2010, the unemployment rate for college graduates age 24 and younger rose to 9.4%, the highest since the Labor Department began keeping records in 1985.
One of Obama’s proposals would advance the start date for a special loan repayment program based on income that aims to help struggling graduates.
The way the Income-Based Repayment Plan works now is that graduates who enroll get charged 15% of their monthly discretionary income to pay off loans, with debt forgiven after 25 years.
Congress passed a law set to go into effect in 2014 that would drop the monthly payment for loans originated that year to 10% of discretionary income and would forgive all debt after 20 years.
The administration would improve on the law by fast-forwarding the new terms to take effect in 2012 on loans originated that year, White House domestic policy adviser Melody Barnes noted Tuesday.
So far, about 450,000 students are enrolled in the income-based repayment plan, but hundreds of thousands more are eligible.
The other proposal would encourage graduates with two or more kinds of federal loans to consolidate their loans, giving them a small interest rate break of 0.5%, according to Barnes.
Obama’s student loan relief event in Colorado followed an appearance in Nevada on Monday in which the president unveiled new measures meant to help struggling homeowners refinance their mortgages. Most economists cite the depressed housing market as one of the primary reasons for country’s continued economic weakness.
Political analysts also cite electoral reasons for the president’s current trip, which has included a number of fundraisers for his upcoming re-election campaign. Obama carried Colorado and Nevada in 2008, but both states are expected to be hotly contested in 2012.
The president’s focus on college loan assistance could also help him with younger voters – generally a core Democratic constituency. In 2008, Obama carried two-thirds of all voters ages 18 to 24, according to national exit polls.
CNN’s Kim Clark, Jennifer Liberto and Alan Silverleib contributed to this report