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Along with his plans to grant student loan debt forgiveness to millions of borrowers, President Joe Biden is moving ahead with a plan to lower student loan repayments and stop their balances from growing because of an accumulation of unpaid interest.
On Tuesday morning, Secretary of Education Miguel Cardona announced the Biden administration’s new student loan repayment plans.
Under the proposed changes, student loan borrowers on the Revised Pay As You Earn (REPAYE) plan would offer $0 monthly loan repayments for individual borrowers who make less than about $30,600 annually and for borrowers in a family of four or more that makes less than about $62,400 annually. The plan would also cut monthly payments in half for undergraduate loan borrowers who do not fall under a $0 monthly loan repayment option. Further, the Biden administration plan would stop borrowers’ balances from growing as a result of accumulating unpaid interest, so long as they make their monthly payments.
“Today the Biden-Harris administration is proposing historic changes that would make student loan repayment more affordable and manageable than ever before,” Cardona said. “We cannot return to the same broken system we had before the pandemic, when a million borrowers defaulted on their loans a year and snowballing interest left millions owing more than they initially borrowed.
