Obama plan targets student loan management

President Barack Obama is taking steps to help thousands of Americans better manage their federal student loan debt.

Details of Obama's plan, announced by the White House yesterday, include streamlining the application process for those enrolling in income-based repayment plans, which set a cap on loan payments based on discretionary income.

About 700,000 people currently participate in income-based repayment plans, but Education Secretary Arne Duncan said the administration believes many more students probably qualify.

"This could be an important tool in helping those folks have an option and avoid going into default," he said.

The White House announced its plan as Republicans and Democrats in Congress continue to struggle over how to avert a doubling of interest rates on new federal student loans for 7.4 million people on July 1. They agree that the 3.4 percent interest rate on subsidized Stafford loans should be extended another year, but disagree over how to pay it.

Republicans made a new offer last week in a letter to Obama after the Senate rejected dueling Democratic and Republican plans in late May. House Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) sent another letter to Obama yesterday, stating they had not received an administration response.

"With all of the great economic challenges facing our country, there is no reason to manufacture political fights where there is no policy disagreement," they wrote.

In a call with reporters, Cecilia Muñoz, director of the White House Domestic Policy Council, said only that the administration's view is that lawmakers should work to find a bipartisan solution.

Obama addressed San Francisco supporters Wednesday, telling them that "the other side" doesn't have any new ideas. The president goes on to a second fundraiser Friday in Los Angeles.