What student-loan borrowers should know about Biden's new debt relief proposals — and why advocates argue they're not enough
Broad student-loan forgiveness isn't the only relief President Joe Biden is hoping to implement for borrowers this year.reforms to income-driven repayment plans, which where created to give student-loan borrowers affordable monthly payments based on income, with the promise of loan forgiveness after at least 20 years.
Here's what you need to know about these proposed reforms, and why some advocates are still pushing for further relief.No - not completely new. The Education Department is amending the Revised Pay As You Earn plan, the latest iteration of which calculates borrowers' monthly payments based on their discretionary income with the promise of debt relief after a set number of years in repayment.
These reforms also cut payments for undergraduates in half — the new plan would require them to pay 5% of their discretionary income on their undergrad student loans, down from the current 10%. Borrowers who only have graduate school loans would continue to pay 10%, and borrowers who have both graduate and undergraduate loans would pay between 5 and 10%, based on average calculated from the share of loans borrower for undergraduate versus graduate studies.
The department estimated that 85% of community college borrowers would be debt-free after ten years of repayment with this change.These proposals will enter a 30-day public comment period, and senior administration officials told reporters that the department plans to implement them this year, alongside Biden's plan to cancel up to $20,000 in student debt for federal borrowers .
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