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Obama expands student loan relief program

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The president's executive action expands a program that caps monthly payments for certain federal student loans at 10 percent of the borrower's discretionary income. (Source: CNN) The president's executive action expands a program that caps monthly payments for certain federal student loans at 10 percent of the borrower's discretionary income. (Source: CNN)

WASHINGTON, DC (CNN) - President Barack Obama on Monday announced plans to expand a program that could provide some student loan relief for more struggling borrowers.

Student loans are the second largest form of consumer debt in the nation, according to the federal government, trailing only home mortgages.

On Monday, Obama offered help for more borrowers to manage that debt.

"We are here today because we believe that in America no hard-working young person should be priced out of a higher education," Obama said.

The president's executive action expands a program that caps monthly payments for certain federal student loans at 10 percent of the borrower's discretionary income.

An additional 5 million borrowers will qualify for the program by December of next year.

The president also asked the Education and Treasury departments to work with some private sector tax preparation firms to communicate with borrowers about repayment options during tax season, when finances are top of mind.

Also part of the plan, measures to help borrowers at risk of - or in - default, and a streamlined process for reduced interest rates for some active-duty military.

The changes arrive as a new class of graduates faces their share of the nation's trillion-dollar-plus student debt burden, a topic of concern on Capitol Hill last week.

There has been growing consensus that today's $1.2 trillion student debt can have repercussions that threaten the broader economy.

Seventy-one percent of students who graduate with a bachelor's degree, graduate with debt, according to the White House, at an average of more than $29,000 per student.

The president also urged Congress to take action on a Democratic plan that would allow borrowers to refinance student loans at lower current rates.

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