"Because of this change, about 1.6 million Americans could see their payments go down by hundreds of dollars a month. And that includes some of the students who are here today," Obama told a raucous crowd at University of Colorado-Denver Wednesday.
Advancing the effective date for the program allowing college graduates to cap loan payments at 10 percent of their income and stop paying after 20 years is latest executive action Obama has taken to jump start the economy without congressional approval.
The existing income-based repayment plan with a "Pay as You Earn" option lets graduates cap their payments at 15 percent of their discretionary income and forgives all remaining debt after 25 years.
"The cost of a college has nearly tripled," Obama said, noting that the average college debt last year was $24,000, surpassing credit card debt.
"Living with that kind of debt means making tough choices," he said.
When he and his wife Michelle married, "we combined [our debt] and got poor together," Obama said, estimating they owed a combined $120,000 in student loans after law school. "It took us almost 10 years to pay off our student debt."
Obama also announced another change, effective from January to June 2012, to let about 6 million graduates consolidate Federal Direct Student Loans and Federal Family Education Loans so they can have a single monthly payment.
"We're going to make it easier for you to have one payment a month at a better interest rate," Obama said. "It won't cost taxpayers a dime, but it will save you money, and it will save you time."
Obama also announced another project to create a model financial aid disclosure form that post-secondary institutions could use to help students better understand the type and amount of aid they qualify for and compare aid packages offered by different institutions.
"We're going to call it 'Know Before You Owe,'" Obama said, "so you have all the information you need to make your own decisions about how to pay for college."
The changes "will save you money," Obama said, as well as help more young people determine "how to afford college."
"It can put more money in your pocket once you graduate," he said. "And because you'll have some certainty, knowing that it's only a certain percentage of your income that is going to pay off your student loans … that means you will be more confident and comfortable to buy a house or save for retirement and that will give our economy a boost at a time when it desperately needs it."
The executive actions he's announced -- including refinancing assistance for homeowners who owe more than their houses are worth to creating job opportunities for military veterans in the healthcare field to giving states more flexibility under No Child Left Behind requirements for education -- won't replace needed congressional action on his American Jobs Act, Obama said.
"But these executive actions can make a difference," he said.
Repeating a theme offered earlier, Obama said, "We're not waiting for Congress. ... We can't wait for Congress to do its job. So where they won't act, I will."