President Obama announced his plan Wednesday at the University of Colorado Denver that will initiate two changes to the federal student loan program and affect up to 1.6 million borrowers according to the Star Tribune.
Though nothing is changing with any private loans, an estimated 5.8 million borrowers of different kinds of federal loans will be able to consolidate them into one loan and reduce their interest rates by up to .5 percent under the new plan starting in January according to The New York Times.
The plan, titled "Know Before You Owe," allows college graduates to limit federal student loan payments at 10 percent of discretionary income and all remaining debt would be forgiven after 20 years, the Star Tribune reports, which is 5 years sooner than the current law states.
Obama, using his power of executive authority, has bypassed Congress to jump-start 3 initiatives that don't require congressional approval to provide mortgage relief, reduce student loan coasts and help employ military veterans the Star Tribune reported.
"You do your job, it's time for them to do their job," Obama said in the Star Tribune. "We don't sit around and wait for things to happen. We're Americans."