Nightly News   |  October 26, 2011

Obama student loan plan could help 7 million

President Obama plugged his new plan to help those with overwhelming student loan debt, capping student loan payments at 10 percent of a graduate’s salary and allowing loan consolidation. NBC News’ Kristen Welker has more.

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This content comes from a Full-Text Transcript of the program.

WILLIAMS: So it was against this backdrop that President Obama formally announced something we first told you about here last night, a plan to help the debt burden on students in this country. NBC 's Kristen Welker has that part of the story.

KRISTEN WELKER reporting: The president's new initiatives, which he plugged in Denver , Colorado , today, could help as many as seven million student loan holders.

President BARACK OBAMA: That means we should be doing everything we can to put a college education within reach for every American.

WELKER: As he did Monday with mortgage refinancing, the president used executive action, today claiming he has the authority to accelerate a program that Congress already had adopted, capping student loan payments at 10 percent of a graduate's income and allowing graduates to consolidate certain federal loans to get lower monthly interest rates. The administration argued today's actions will help improve the overall economy.

Pres. OBAMA: That means you will be more confident and comfortable to buy a house or save for retirement, and that will give our economy a boost at a time when it desperately needs it.

WELKER: Some economists warn the impact will likely be minimal.

Mr. GARY BURTLESS (Brookings Institution): My suspicion is it's actually not going to be all that large in the short run. Any short run effect is likely to be dominated by students deciding, 'I can now take the risk of borrowing more.'

WELKER: The president has kept up his steady tongue lashing of Congress for failing to pass his jobs bill. But by visiting this Denver university , he's also trying to re-energize one of his core constituencies that put him in office, young people. A key Republican pushed back today in a statement. "Sadly, the president has once again chosen to put politics before policy, touting a plan that will do nothing to help the nation's unemployed workers." The White House maintains that the 36 million student loan holders owe more debt than credit card owners. And with tuition costs rising, a little bit of help could make a big difference. Kristen Welker, NBC News, Denver , Colorado.