Administration Announces Student Loan Changes | FDL News Desk

Administration Announces Student Loan Changes | FDL News Desk:

Administration Announces Student Loan Changes

by David Dayen

(photo: Kyle James)

There was an expectation of a new announcement from the Obama Administration on student loans Wednesday, and we got a preview this afternoon. Responding, in the words of White House officials, to a petition at their newWe the People petition site, the Administration will institute two new programs that could potentially save students who qualify hundreds of dollars a month on their student loans.

The Wall Street Journal explained the outlines of the plan today. But here’s the direct statement from the White House:

The Administration is moving forward with a new “Pay As You Earn” proposal that will reduce monthly payments for more than one and a half million current college students and borrowers. Starting in 2014, borrowers will be able to reduce their monthly student loan payments to 10 percent of their discretionary income. But President Obama realizes that many students need