ICYMI: Biden-Harris Administration Announces New Actions to Tackle Student Debt Crisis and Save Borrowers Money
FOR IMMEDIATE RELEASE: January 11, 2023
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ICYMI: BIDEN-HARRIS ADMINISTRATION ANNOUNCES NEW ACTIONS TO TACKLE STUDENT DEBT CRISIS AND SAVE BORROWERS MONEY
WASHINGTON, D.C. — Yesterday, the Biden-Harris Administration announced new actions to tackle the student debt crisis and save middle class borrowers money. These actions make payments more affordable, giving millions of middle class Americans more breathing room in their budgets each month – and pause payments for anyone making less than $30,600 a year. On average, this will mean Black and Latino borrowers will see their payments-per-dollar-borrowed cut in half, and the average 4-year college graduate will save nearly $2,000 a year. Put together, the administration’s actions will create the most affordable student loan repayment plan ever.
Yesterday’s announcement builds on President Biden’s previous executive actions to tackle the student debt crisis, and underscores his firm commitment to creating opportunity for the middle class. His policies will help to give young people across the country greater freedom to buy a home, create a business, or start a family.
See more coverage of this historic announcement across the country:
New York Times: What to Know About Biden’s Income-Driven Repayment Proposal
The Education Department on Tuesday released long-awaited details on a piece of President Biden’s student loan debt plan that would enable millions of borrowers to cut their monthly federal payments by more than half — perhaps the most consequential component of the president’s broader initiative to make the loan system more manageable.
Axios: New Biden student loan proposal could cut some borrowers’ payments
A new student loan payment proposal unveiled by the Department of Education on Tuesday would lower monthly payment amounts for some Americans while completely pausing payments for others. The regulatory changes to the Education Department’s existing income-driven loan repayment plan could provide student loan relief after the total pause on repayments, which was extended to the end of June 2023, is lifted.
CNBC: Biden administration proposes new student loan repayment plan that could cut some payments in half
The U.S. Department of Education proposed regulations Tuesday that would reduce the monthly bills for certain federal student loan borrowers. The new repayment plan could lower monthly payments for certain borrowers to 5% of their discretionary income, from 10%. Some borrowers may save $2,000 a year from the change, according to a fact sheet.
CNN: Biden Admin announces new plan to lower student loan payments
“It mainly targets low and middle income borrowers, people enrolled in the loan repayment plan tied specifically to income. And the Department of Education estimates that roughly 8 million people this could affect. People could see potentially huge savings, monthly payments cut in half or even potentially paused.”
IN THE STATES
Atlanta Journal-Constitution: Feds propose new rules aimed at helping borrowers repay student loans
The U.S. Department of Education on Tuesday unveiled proposed new regulations that officials said would make it easier to afford student loans payments. The changes would revamp how federal income-driven repayment plans work by, in part, raising income thresholds so more borrowers are eligible for $0 monthly payments.
Wisconsin Examiner: New federal student loan repayment plan aimed at low-income borrowers
U.S. House Education and the Workforce ranking member Rep. Bobby Scott, Democrat of Virginia, praised the plan in a Tuesday statement. “The administration’s proposed overhaul will create the most affordable income-driven repayment plan that has ever been made available to student loan borrowers, simplify the program, and correct the mismanagement of student loan repayment data,” he said.
ABC 7: Biden student loan plan could reduce how much people pay and for how long
Under the new plan, the lowest-income borrowers would see their payments fall by about $0.83 per each dollar they owe, the Department of Education estimated. The highest-income borrowers would see their payments per dollar fall by about $0.05.
Michigan Advance: New federal student loan repayment plan aimed at low-income borrowers
Under the proposed rule, undergraduate borrowers would only be required to pay 5% of their income toward their loans, which would be down from the 10% required under the current income-driven repayment plan. The proposed rule would also amend the “Revised Pay As You Earn” federal plan to offer zero monthly payment plans to any borrowers who make less than $30,600 a year and any borrower in a family of four who makes less than $62,400.
ABC11: New student loan repayment proposal aims to help borrowers succeed
The Biden administration shared details about a new student loan plan, as it works to address borrowers’ concerns over debt repayments. This proposal would link student loan amounts with a borrower’s income, using a sliding scale to provide the greatest relief to those making the least amount of money.
WAAY31: What to know about a student loan proposal that offers relief for borrowers making less than $30,600
One proposed change would raise the threshold for repayments. Single borrowers making less than $30,600 per year would not need to make any payments under the proposal, up from the current $24,000 threshold. The figure is based on the poverty line, Kvaal said.
“Education Department officials are calling this new plan the ‘student loan safety net.’ They say it would cap payments for undergraduate loans, so what you owe each month would be much lower. The proposal helps with the debt repayment plans that are based on your income.”
“There could be more relief coming for student loan borrowers. A new proposal from the Biden Administration that would lower payments for some Americans. It would also pause payments completely for anyone making less than $30,600 a year. The current threshold is $24,000. Those who make more than that would see their payments cut in half. There will also no longer be a charge for unpaid monthly interest. The final rule could be released later this year.”