Recent graduates with federal student loans are now able to enroll in a new repayment plan, according to the U.S. Department of Education.

The plan, called the Pay as You Earn plan, puts a limit on monthly federal student loan bill payments at 10 percent of a borrowers’ discretionary income. The department estimated that up to 1.6 million direct loan borrowers may be eligible.

Borrowers may end up paying more in interest under the income-based plan.

“We know many recent graduates are worried about repaying their student loans as our economy continues to recover, and now it’s easier than ever for student borrowers to lower monthly payments and stay on track,” said U.S. Secretary of Education Arne Duncan in a press release.

President Barack Obama first introduced the plan in October 2011.