By Anna Bahr
If you’re a student loan-burdened recent college graduate putting the final touches on a note to President Obama, thanking him for his recent executive order on debt repayment, don’t get too excited.
Mr. Obama formally widened the pool of eligible participants in the Pay as You Earn program (PAYE) and said it could save recent graduates hundreds of dollars every month, helping an additional five million people manage their student debt. It fulfills a promise — made in a chipper, animated advertisement posted to Mr. Obama’s YouTube channel in 2011 — that graduates would not have to make student loan repayments greater than 10 percent of their income.
But if you look at the numbers closely, PAYE saves you money only if you borrowed big and earn little.
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