By Mark Felsenthal
WASHINGTON (Reuters) - President Barack Obama on Monday signed an executive order making it easier for up to 5 million people to pay off college tuition debt, and scolded congressional Republicans for opposing legislation that would lower student-loan borrowing costs.
The action, which does not take effect until December 2015, will allow more people to limit repayments of federal student loans to 10 percent of their monthly incomes.
The administration will also try to lower student costs by renegotiating government contracts with companies like Sallie Mae that service student loans, he said.
The president said Congress should also take steps to ease debt burdens on students, 71 percent of whom earn bachelor's degrees with debt, which averages $29,400.
Senate Democrats have proposed legislation that would allow millions of Americans to refinance both federal and private undergraduate student loans at lower interest rates.
The bill is unlikely to overcome the opposition of Republicans, who say the measure would come at too high a cost for the government. Obama said Republicans were not doing enough to support students, arguing that it should be possible for graduates to get a lower interest rate in the same way homeowners are able to.
"If you're a Big Oil company, they'll go to bat for you," he said. "If you're a student, good luck."
Democrats hope the issue will distinguish them from Republicans in the eyes of voters and help them retain control of the Senate in November elections, Guggenheim Partners analyst Chris Krueger said.
"This Democratic pivot to student loan forgiveness is entirely political and is not designed to become law but rather to be used as a wedge issue in the midterm elections," Krueger wrote in a research note to clients.
(Reporting By Mark Felsenthal; Editing by David Gregorio)