The president said Monday he would direct Secretary of Education Arne Duncan to begin the process of amending its regulations to allow borrowers with existing debt to cap student loan payments at 10 percent of monthly income, opening up the "Pay As You Earn" program already made available to new borrowers.
The government will also renegotiate contracts with private student loan servicers to help give borrowers more flexibility in their repayment plans and move to improve the information available to borrowers about their options.
Obama welcomed students to the White House for a signing ceremony Monday, noting that many of them were graduating from college this month.
"Once the glow wears off, this can be a stressful time for millions of students," he said, "and they're wondering how on earth they're going to pay off their student loans."
The president pointed out that while those with college degree still make, on average, $28,000 a year more than those with just a high school diploma, the average undergraduate student still faces some $30,000 in debt on commencement day.
Obama positioned his efforts to reduce the student loan burden -- estimated to be $1.2 trillion -- as a question of values, hammering congressional Republicans for blocking efforts to even the playing field.
"If you're a big oil company, they'll go to bat for you," he said. "If you're a student, good luck."
"I have made it clear that I want to work with Congress on this issue," he said. "Unfortunately a generation of people cannot wait."
The president urged the Senate to pass a bill, sponsored by Elizabeth Warren, D-Mass., that would allow borrowers to refinance the interest on existing loans to the 3.86 percent passed by Congress last year for new loans. Warren's bill, according to the nonpartisan Congressional Budget Office, would be fully paid for by enacting the Buffett Rule, which would close the so-called millionaires loophole allowing the very rich to pay taxes at lower rates than those in the middle class.
Obama called on Americans to pay attention to how their lawmakers voted, and to "let them know you're watching." But if he hoped for a warm reception from Republicans, he'll quickly be disappointed.
Before the president had concluded his remarks, Rep. John Kline, the chairman of the House Education and the Workforce Committee, released a statement slamming the administration's move.
"It doesn't take a degree in political science to see today's announcement as another distraction from the president's failed policies," Kline said. "Washington Democrats should stop treating students and families as political pawns and start working with Republicans on real solutions that will move the country forward."