President Barack Obama unveiled new programs for college students to consolidate loans and reduce interest rates that will begin in 2012.

The loan programs, announced on Oct. 25, were designed to start in 2014, but a White House press release stated that the Obama administration acknowledges that “many students need relief sooner than that.”

“Pay As You Earn,” one of the initiatives, will allow 6 million college students and recent graduates to consolidate their loans and reduce their interest rates in January, and it will allow 1.6 million students to cap their loan payments at 10 percent.

Currently, borrowers can pay 15 percent of their discretionary income, and their debt may be forgiven after 25 years. Under the new program, borrowers will pay 10 percent of their discretionary income for monthly payments and their federal student loan debt balance will be forgiven after 20 years of payments.

“In a global economy, putting a college education within reach for every American has never been more important,” the White House stated in the press release. “But it’s also never been more expensive. That’s why today we’re taking steps to help nearly 1.6 million Americans lower their monthly student loan payments.”

According to the College Board, 34 percent of undergraduate students took out federal Stafford Loans in the 2010-11 school year. Of those borrowers, 74 percent used both subsidized and unsubsidized loans.

Students continue to take out loans to cover the increasing cost of tuition. This year the College Board reported that average in-state tuition at public universities is now $8,244, up from $7,613 last year. Coupled with room and board costs, average total costs for college are now at $17,131, up from $16,162.

Dennis Chavez, director of financial aid and student accounts at BU, said “Pay As You Earn” would benefit low-income graduates.

“Anything we can do to help young grads in this economy with loan payments would be a plus,” Chavez said.

Chavez said this program could have helped his own daughter.

“My daughter, who is now a teacher, would have benefited from a program like this,” Chavez said. “The program will help those who have loans with interest rates that increase.”

Chavez said he thought most BU students would likely not be affected.

“[The program] will not affect students here because Binghamton has been participating in direct lending for a while now,” Chavez said. “Students may not have those kinds of loans. Exceptions would be graduate students or transfer students.”

Chelsea Murphy, a sophomore majoring in biology, said she believes the programs are beneficial.

“Once you graduate you have more financial responsibility,” Murphy said. “Reducing monthly payments fits into a budget easier. It’s not so much money all at once.”

Anthony Aguiar, a junior majoring in applied behavior analysis, had a different view on the new loan programs.

“I think it’s one of those believe-it-when-I-see-it type deals,” Aguiar said. “It’s in the distance. Going to a SUNY school, most people could pay off [student] loans within 20 years. I’m curious as to how they’re going to do this at no cost to the taxpayer. I feel like either way I’m going to end up paying for it.”President Barack Obama unveiled new programs for college students to consolidate loans and reduce interest rates that will begin in 2012.