Will it help?
The White House estimates the new provisions can lower payments for more than 1.6 million borrowers, but critics argue far fewer students will actually benefit.
"Unless you have really low income, you'll end up paying the loan off before you'd ever have anything forgiven," says Orsolini. "If you have borrowed the maximum $27,000 (federal loan allowance) and if you make $24,500 (per year), you'll pay your loan off in less than 20 years."
Publicity -- or lack thereof -- may be another barrier. Millions of borrowers can lower their monthly payments through the current income-based repayment plan, but only a few have enrolled, says Lauren Asher, president of the Institute for College Access and Success, an Oakland, Calif.-based nonprofit that focuses on financial aid policy.
"People still don't know about income-based repayment," she says. "We estimate that about 500,000 borrowers are enrolled now, which, frankly, is far lower than what we would expect in this climate."
The initiatives offer some consolation in contrast to more drastic 2012 financial aid changes. Next July, the interest rate on subsidized Stafford loans for undergrads will double from 3.4 percent to 6.8 percent, the government will stop subsidizing Stafford loans for graduate students, and the family income threshold to qualify for a full Pell Grant will decrease from $30,000 a year to $23,000. The government will also shorten the number of semesters students can qualify for a Pell from 18 to 12, making it tougher for nontraditional students, and will eliminate federal financial aid for students without high school or GED diplomas who entered higher education through the Ability to Benefit program. The American opportunity tax credit, the largest education tax credit currently available, is also scheduled to expire at the end of 2012, while college tuition continues to increase an average of 8 percent this year, according to Finaid.org.
"If you're currently in college, there's not a lot you can do. You're just going to have to buck up and pay (the cost increases)", says Orsolini. "If you have kids going off to college, you've certainly got to take a look at all these factors and plan them into your college decisions."