The Biden administration has announced a new proposal that would lower student loan payments for millions of Americans, while also pausing payments for those making less than $30,600 a year.
Deputy Secretary James said the changes to existing income-driven loan repayment plans would “transform college financing and reduce future borrowers’ total payments per dollar by $0.40, while targeting that help on low- and middle-income borrowers.”
Secretary of Education Miguel Cardona said in a call with reporters Monday evening that the new plan is a “student loan safety net” that will prevent borrowers from getting overloaded with debt.
“Today, we’re making a new promise to today’s borrowers and for generations to come: Your student loan payments will be affordable,” Cardona said. “You won’t be buried under an avalanche of student interest, and you won’t be saddled with a lifetime of debt.”
The proposal is part of the Biden administration’s efforts to make college more affordable and reduce the burden of student debt. The Department of Education estimates that the plan will save borrowers an average of $2,000 over the life of their loan.
The proposal is currently under review by the Office of Management and Budget and is expected to go into effect in the coming months.
Key takeaways:
- The Biden administration has proposed a plan to lower student loan payments for millions of Americans and pause payments for those making less than $30,600 a year.
- The plan is part of the Biden administration’s efforts to make college more affordable and reduce the burden of student debt.
- The proposal is currently under review by the Office of Management and Budget and is expected to go into effect in the coming months.
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