President Barack Obama outlined initiatives to decrease monthly loan payments of soon-to-be college graduates in a proposal Tuesday afternoon.
The bill would expand an existing loan repayment program that capped student loan repayments at 15 percent of the student’s discretionary income – income left after taxes and basic necessities are paid for.
The plan would also reduce monthly payments to 10 percent of students’ discretionary income, according to a statement released Tuesday from the White House.
In addition, Obama’s plan aims to consolidate federal student loan program repayment.
Students supported by multiple federal programs would be able to make single monthly payments instead of multiple payments to different programs, which would significantly reduce interest payments, according to the statement.
“The need for enough income to make large monthly payments may discourage some graduates from starting a new job-creating business or entering teaching or another lower-paying public service career,” the statement said.