WASHINGTON (MarketWatch) — President Barack Obama is set to unveil Wednesday a plan to reduce the burden of student loans on college graduates as the amount of debt for higher education surges.

Under the changes, students with loans issued by private banks and the government will be able to consolidate the two types of loans into a single government loan with a lower interest rate.

In addition, Obama will also speed up changes that will cap a graduate’s annual federal student loan repayment at 10% of his or her income. The reforms, now due to go into effect next year, had been scheduled to take effect in 2014.

The student-loan proposals are one of a series of measures Obama is touting this week on a swing to the West Coast and Colorado to show that his administration is doing what it can to help the struggling economy despite the stalemate in the House and Senate over his $450 billion jobs plan.

On Monday, Obama introduced a mortgage refinance rule that will allow more underwater homeowners to reduce their monthly payments. See story on mortgage refinance.

And the issue over student-loan debt, at a time when the unemployment rate for 20- to 24-year olds is 14.7%, has been a key concern expressed by the Occupy Wall Street protests. Read more on Occupy Wall Street blog.

Pauline Abernathy, vice president of the Institute for College Access and Success, said students are borrowing more to pay for college and more graduates are struggling to repay their loans.

Based on consumer credit data released by the Federal Reserve, the federal government’s student loan program has risen to $392 billion in August 2011 from $107 billion in the same month in 2008, according to an estimate by Troy Davig, an economist at Barclays Capital.

Students can still obtain private loans for colleges. Abernathy said there is little public data about the private student-loan market but said that more than $20 billion in student loans were being made annually at the peak of the market before the financial crisis.

Most of these loans were made with variable, uncapped interest rates “that are the highest for those least able to afford them,” Abernathy said.

Private student loans remain a “wild west” of lending practices and standards, she said. The Institute for College Access and Success is hoping that the new Consumer Financial Protection Bureau will move to reform the sector, Abernathy said.