* Obama to ease the loan burden for millions of graduates
* Executive action puts more money in graduates' pockets
* Change rules to allow some loans to be consolidated
WASHINGTON, Oct 25 President Barack Obama is
taking steps to ease the burden of student loans, the White
House said on Tuesday, potentially helping millions of
cash-strapped college graduates in a tough U.S. economy.
Obama plans to accelerate a plan to cap student loan
payments at 10 percent of income, bringing it forward to start
in 2012 from 2014.
"Steps like these won't take the place of the bold action
we need from Congress to boost our economy and create jobs, but
they will make a difference," he said in a statement.
The loans initiative will be the third such move by Obama
in as many days, following action to aid homeowners and boost
hiring of military veterans. The White House wants to show he
is an activist president battling a "do-nothing" Congress.
The loan changes do not require approval by Congress.
Republican lawmakers blocked a $447 billion jobs plan put
forward by Obama last month because it raises some taxes.
Obama will announce the measure in Denver on Wednesday as
he wraps up a swing through western U.S. states that will be
vital to his re-election campaign in 2012.
The White House estimates the loan changes could cut
monthly payments for 1.6 million graduates.
Student debt will also be forgiven after 20 years, compared
with 25 years under current law.
More than 36 million Americans have federal student loan
debt, but only 450,000 have so far taken advantage of the
existing income-based repayment program.
Obama will also make changes to allow 6 million students to
bundle together certain federal loans to allow a single monthly
payment, reducing the risk of default caused by juggling
multiple debt obligations.
The option will be open from January and 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.
"College graduates are entering one of the toughest job
markets in recent memory, and we have a way to help them save
money by consolidating their debt and capping their loan
payments," said U.S. Secretary of Education Arne Duncan.