The Education Department proposed revisions after Biden’s Student Debt Relief Plan was put in question. The revisions reportedly intend to cut students’ loans for as low as $0.The U.S. Department of Education has proposed revisions to the income-driven repayment (IDR) plans after the U.S. President Joe Biden’s Student Debt Relief Plan was put in question. These proposed revisions will reportedly amend the Revised Pay As You Earn Repayment (REPAYE) plan. This means that the three other IDR plans will be discontinued. These three IDR plans include the Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), and the Pay As You Earn Repayment (PAYE).
According to Nadelle, the proposed revisions to the Student Debt Relief Plan may cause significant cuts to the student borrowers’ loan payments. Some student borrowers may even have $0 monthly payments. Once the new plan is authorized, the existing borrowers from the previous IDR plans will need to enroll again. These borrowers can enroll through the Federal Student Aid website or with their student loan providers.
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Who is qualified for the $0 monthly payments?
According to Nova, to be qualified for the $0 monthly payments, the student borrowers must earn less than $30,600 every year. On the other hand, a family of four must earn less than $62,400. Reportedly, the undergraduates’ loan payments will be reduced in half. This is because the new Student Debt Relief Plan will change the discretionary income payment to 5% from 10%. Borrowers with graduate loans will continue to pay 10%. However, those with both graduate and undergraduate loans must pay 5% to 10%.
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