President Barack Obama’s administration will enact a series of reforms to help college students manage their loans, the White House announced Tuesday.
Obama’s three main proposals will let students cap their student-based loan payments at 10 percent of their expendable income, consolidate loans and increase knowledge about financial aid for students leaning toward taking out loans.
Currently, student loan borrowers can cap monthly payments at 15 percent of their expendable income, but Obama and Congress enacted a plan last year to reduce that amount by 5 percent as part of a “Pay As You Earn” proposal. That will decrease monthly payments for an estimated 1.6 million student borrowers and go into effect next year, according to the news release.
The government plans to let students consolidate their direct loans with Federal Family Education Loans to save money on interest and reduce payments to one per month.
“Putting a college education within reach for every American has never been more important,” Obama said in the release.
The government’s proposed “Know Before You Owe” project will create a Financial Aid Shopping Sheet that outlines loan coasts before students enroll at universities.
 
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Contact Andrea Gallo at [email protected]