College students
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Bill Radke: When President Obama gives his State of the Union address tonight, he'll announce new initiatives aimed at helping the middle class. One of those proposals could help college students deal
with the burden of loans. From the Marketplace Education Desk, Caitlan Carroll has more.

Caitlan Carroll: Right now, most graduates must spend 15 percent of their disposable income paying off their federal student loans each month for up to 25 years. Under the new proposal, loan payments will drop to 10 percent of disposable income, and will be forgiven after 20 years.

Erin Barnhart says the change couldn't have come at a better time. She's just finishing up a doctoral degree in urban studies.

Erin Barnhart: I hope that, you know, for some people that's going to break down some of those barriers to going to school. But for people who have already taken the leap, like myself, it gonna make a real big difference.

Barnhart owes over $100,000 in student loans. And there aren't a lot of jobs in her field right now.

Mark Kantrowitz is a publisher of financial Web sites like He says the plan will be relatively inexpensive for the government because most people pay off their loans.

Mark Kantrowitz: And it also means that students who borrow money can be assured that by the time their own children enroll in college, they will not still be paying back their own student loans.

The proposal is expected to be included in the president's budget next week, and still needs to be approved by Congress.

I'm Caitlan Carroll for Marketplace.