DENVER—President Barack Obama will announce a plan Wednesday that would allow Americans to consolidate and reduce interest rates on their student loans, the latest in a string of narrowly tailored moves designed to jolt the economy.

The centerpiece of the plan Mr. Obama is expected to unveil here would allow the estimated 5.8 million people who hold both direct government student loans and government-backed private loans to consolidate their debts into one government loan.

The switch would help borrowers because the U.S. would essentially be refinancing the private loan at the lower government rate. Administration officials estimate borrowers would receive a reduction of up to 0.5% in their interest rate.

The president is also expected to say the administration is moving up the start of a program approved by Congress that caps monthly student-loan payments for borrowers with low incomes, from 2014 to 2012.

Wednesday will be the third day in a row Mr. Obama has announced an executive action aimed at bypassing Congress, including a housing refinancing plan and a proposal to train and hire veterans. The switch in emphasis comes in the face of staunch Republican opposition to his jobs package, which hasn't advanced in Congress despite weeks of presidential advocacy.