New Orleans As President Obama tries to throw muscle up for the political season yesterday we saw some bank subsidization through refinance charges and lower monthly payments for homeowners trying to hold onto their houses regardless of whether or not it makes good economic sense anymore in their local market.  Basically, they “won” lower monthly payments.  Now with millions of students facing a crippled future from student loans, Obama is again acting under his executive authority and for some of the loans cutting monthly payments by allowing consolidation to lower interest and importantly for lower income loan recipients reducing the amount of gross income they need to pay to 10% and the term of the loan from 25 years to 20.  I’m not sure that we are going to see many of these strapped students dancing in the street, but it is a little something if they can accept delayed gratification and cast a vote for the President.

The Times described the program as follows:

“…expand the existing income-based repayment program with a “Pay as You Earn” option that would allow graduates to pay 10 percent of their discretionary income for 20 years and have the rest of their federal student loan debt forgiven. That plan would start next year.

Most of the 450,000 low-income student-loan borrowers currently enrolled in income-based payment must pay 15 percent of their discretionary income for 25 years before having their debt forgiven, although terms are easier for those in public service.

Perhaps as interesting is the fact that the Times also gave some credit for the small win to the Occupy Wall Street forces, partially because this has been a subject of many signs in the encampments and shortlisted on many of the demand sheets.  The communications folks for the White House also “explained” the move to this program citing 30,000 signatures on a petition on the White House website.

This is more interesting to me than the increase in many ways.  The Obama Administration seems to be lighting up a neon sign on Pennsylvania Avenue that says, “build a movement, and we will cave!”  Love that!!!  They seem to be signaling (once again, because I believe they have been doing this for 3 years!), that if you hit them, you will win.

Sounds like a sign.  Seems like a plan!