New Student Debt Repayment Plan Intends To Cut Loan Balances To As Low As $0

The White House introduced a new Student Debt Repayment Plan that intends to cut loan balances to as low as $0. This initiative was made after the pause on federal student loans will expire in October.

The White House announced a new Student Debt Repayment Plan as the payments on federal student loans are scheduled to resume this coming October after being paused since 2020. Reports say eligible borrowers who meet specific income thresholds could have their student loan balances cut to as low as $0.

In addition, according to Picchi, the White House launched a beta website for individuals to sign up for applications and discover which Student Debt Repayment Plan could work for them. Further reports say the beta website laid out four repayment plans that will allow an applicant to make payments based on their income. The U.S. Department of Education stated that the applications will be processed before the repayment resumes.

READ ALSO: New Income-Driven Student Debt Repayment Plan: Biden Administration Is Launching Beta Website!

View on New Student Debt Repayment Plan

According to Duncan, Political Science Associate Professor Ian Anson of the University of Maryland-Baltimore County stated that the new Student Debt Repayment Plan will address the interest rates which became one of the reasons why borrowers are still struggling in paying off loans even years after finishing school.

READ ALSO: Student Debt Relief Plan Related Scams Escalating As Repayments Resume In October