Student Loan Borrowers Have Only Three More Days To Weigh In On Biden’s New Plan

There are just a few days left for anyone who want to weigh in on President Biden’s proposed changes to income-driven repayment for student loans. Millions of borrowers would get a reduction in their monthly payments according to administration proposals, while others would have their student debt forgiveness programmes accelerated.

What debtors should know is detailed below.

A government income-driven repayment plan that bases monthly payments on a borrower’s income and family size, Revised Pay As You Earn (REPAYE) was suggested for revision by the Education Department last month. REPAYE, like other income-driven schemes, may lead to the complete cancellation of your student loans in the long run.

The programme as it now stands would have to undergo significant revisions to accommodate certain adjustments that have been proposed:

Monthly payments for undergraduate student loans might be cut by as much as half. In a similar vein, borrowers with post-graduate loan balances would experience decreased payments, but on a smaller scale.
Currently, it takes 20 years for undergraduate students with sums of $12,000 or less to qualify for debt forgiveness. This proposal would reduce that time to 10.

Under REPAYE, a borrower’s student loan interest wouldn’t accumulate if it was more than the amount the borrower could afford to pay each month.
A borrower’s eligibility for student debt forgiveness may be extended by the number of years spent in deferral or forbearance.

As is the case with existing income-driven schemes, married borrowers would be allowed to exclude spousal income by filing taxes separately (but not under the current version of REPAYE).

Predictably, opinions on Biden’s idea to revamp the REPAYE programme have diverged. However, Republicans in Congress have said the idea is too pricey and generous, saying it “would fundamentally undermine our higher education finance structure.”

The reaction from student loan borrower advocacy organisations has been more positive, with members hailing the reduced payments and the end to the accumulation of unnecessary interest. Critics of the proposal note that it does not address the issue of Parent PLUS loans and does not reduce the length of time borrowers have to pay back their loans.

Revisions to the REPAYE programme are still in the works. It is required by law that the Department of Education provide a formal public comment period during which any interested party may voice their opinions on the proposed strategy. Officials are obligated to take public feedback into account while writing the rules to the letter.

The federal regulatory site is open for input from borrowers on all aspects of the new plan. Borrowers who want to weigh in on this issue should do so before the comment period closes on Friday, February 10. However, despite Republican requests, the Biden administration has shown no evidence of extending the comment period.

The Education Department will approve the rules after the comment period ends. There has been no word from the powers-that-be on when the REPAYE overhaul will begin.