Feds propose ‘student loan safety net’ alongside forgiveness
The White House is moving forward with a proposal that would lower student debt payments for millions of Americans now and in the future, offering a new route to repay federal loans, according to a report from the Associated Press.
President Joe Biden announced the repayment plan in August, but it was overshadowed by his sweeping plan to slash or eliminate student debt for 40 million Americans. Despite the low profile of the payment plan, however, some education experts see it as a more powerful tool to make college affordable, especially for those with lower incomes.
The Education Department formally proposed the new repayment plan on Tuesday by publishing it in the Federal Register, starting a public comment period that often takes months to navigate.
If it’s finalized, the proposal would give a major overhaul to income-driven repayment plans — one of several payment options offered by the federal government. The resulting plan would have lower monthly payments, an easier path to forgiveness, and a promise that unpaid interest will not be added to a borrower’s loan balance.