Obama plans to ease student loan burden
President Barack Obama vowed on Wednesday to take steps to ease the burden of student loans, potentially helping cash-strapped college graduates in a tough U.S. economy.
Obama said he planned to speed up a plan to cap student loan payments at 10 percent of income, bringing it forward to start in 2012 instead of 2014.
The White House estimates the loan changes could cut monthly payments for 1.6 million graduates.
Americans owe more on student loans than on outstanding credit card debt, and total loans outstanding are slated to exceed $1 trillion this year, according to the Federal Reserve Bank of New York.
Under the plan, student debt will also be forgiven after 20 years, compared with 25 years under current law.
Obama will also make changes to allow 6 million students to bundle together certain federal loans to allow a single monthly payment.
The option will be open from January. Those that take it up will also get a 0.5 percentage point cut in the interest rate on some of their loans, lowering monthly payments and potentially saving them hundreds of dollars in interest.
The loan changes do not require approval by Congress.
(Writing by Ian Simpson; Editing by Jerry Norton)