President Barack Obama today is to announce an expansion of a program that helps student loan borrowers manage their debt, according to a White House official, CNNMoney reported.
The official said Obama will expand the criteria for an alternative repayment program, which caps monthly payments for certain federal student loans at 10 percent of a borrower's discretionary income.
The changes would allow an additional 5 million borrowers to qualify and will be available beginning in December 2015, the official said.
The alternative payment programs are designed to help borrowers struggling under the weight of student loans. They include forgiveness programs for on-time payments and public-sector employees. Teachers can have their balance canceled after 10 years. Low-income borrowers can have their balance canceled after 20 or 25 years of on-time payments.
Borrowers who don't qualify for forgiveness but use a repayment program find their monthly payments reduced but spread out over a longer period of time. That means they will pay more over the lifetime of the loan, as there is additional time for interest to accrue.