President Barack Obama announced new regulations for the repayment of student loans Wednesday.
The new rules are expected to ease the burden placed on 1.6 million students who make federal debt payments, Obama announced at the University of Colorado in Denver Wednesday morning.
The initiative accelerates an income-based repayment plan that reduces the maximum required payment on student loans to 10 percent of annual income. The measure was supposed to go into effect in 2014, but Obama wants it to start next year.
Obama also announced a program to allow borrowers to consolidate their loans and get a lower interest rate.
The president says by lowering loan payments, people will feel more confident buying houses and making other purchases that will give the economy a much-needed boost.
Thousands of students in California who have struggled increasingly with repayments will benefit from the new rules. This year, 8 percent of California students defaulted on loans taken out in 2009, according to a U.S. Department of Education report released last month.
The savings will come as a relief to students attending California universities – which now has the highest rate of tuition increases in the country, according to a College Board report released Tuesday.
That report found that despite a hefty 21 percent increase in tuition, California's average annual cost to attend college of $6,521 was less than the national average of $7,186.