President Barack Obama will announce a measure to jump start the economy — this time through students— Wednesday on a tour through the western states.
During a morning stop at the Auraria Campus in Denver, Colo., Obama intends to announce a plan that would make millions of student loan borrowers eligible to lower their payments and consolidate their loans.
The plan, which Obama is enacting through his executive authority in an effort to bypass Congress, reduces the maximum repayment on student loans from 15 percent of discretionary income annually to 10 percent. According to the plan, which Obama is pushing to go into effect in 2012, the remaining debt would be forgiven after 20 years instead of 25. This measure could affect about 1.6 million borrowers.
The plan also will allow borrowers who have loans from both the Family Education Loan Program and a direct loan from the government to consolidate them into one loan, potentially affecting an additional 5.8 million borrowers.
U.S. Secretary of Education Arne Duncan said that the changes could save some borrowers hundreds of dollars a month, AP reported.
The speech will be broadcast at 9:45 a.m.