Obama pushes bill to refinance student debt

President Barack Obama used the college commencement season Saturday to endorse Senate Democratic legislation that would let college graduates with heavy debts refinance their loans.

The Senate is expected to debate the legislation next week, but it faces significant obstacles. In his weekly radio and Internet address, Obama said the program would be funded by eliminating tax loopholes for millionaires. He said the choice facing lawmakers is whether to "protect young people from crushing debt or protect tax breaks for millionaires."

According to the Institute for College Access and Success, the average debt for the class of 2012 was $29,400. Obama also said that the unemployment rate for college graduates is about half what it is for high school graduates, and that a typical college graduate makes $15,000 more a year than a worker with just a high school degree. Total student debt currently exceeds $1 trillion.

"At a time when college has never been more important, it's also never been more expensive," Obama said.

The White House is drawing attention to college affordability and student loans Monday with an event featuring Education Secretary Arne Duncan as well as Jill Biden, the wife of Vice President Joe Biden. At the event, Obama also plans to announce executive actions to ease the student debt burden, according to the New York Times.

The Times said the president would expand on a 2010 law that capped interest payments on student loan debt at 10 percent, adding some 5 million borrowers who failed to qualify for that cap because their loans were initially too old to qualify.

The Times also said that Obama planned to lay out an action by the Education Department to “renegotiate contracts with companies that service federal loans to give them additional financial incentives to help borrowers avoid delinquency or default.”

Senate Republican leader Mitch McConnell of Kentucky criticized the Senate legislation – sponsored by Elizabeth Warren, D-Mass. – for not addressing college costs.

"This bill doesn't make college more affordable, reduce the amount of money students will have to borrow, or do anything about the lack of jobs grads face in the Obama economy," he said in a new release.

Al Jazeera and The Associated Press