Student loan borrowers could soon pay less money back on their loans and be on the hook for a shorter amount of time, should a new Biden administration rule take effect later this year.
The Department of Education on Tuesday began the regulatory process to bring the new loan repayment program into effect -- but the exact timing for when student borrowers could take advantage of the new system wasn't clear,The process could take any number of months, though it will likely not be finalized before springtime at the earliest, a source familiar with the discussions said.
At their core, the revisions to the program are intended to allow Americans to pay back less in loans over time.RELATED: 9 million people received emails that mistakenly said their student loan forgiveness was approved But Cardona on Tuesday called the revisions to the loan repayment program the most influential part of the Biden administration's plan.The new plan would prevent single low-income Americans from having to make any monthly payments if they make less than the annual equivalent of $15 an hour, which is around $30,600 a year. For a married couple with two kids, that would rise to $62,400.
After 10 years, the new plan would relieve outstanding debts for people who took out less than $12,000 in loans initially -- commonly students who attend less expensive, shorter programs like community college. Asked if the Department of Education could still afford the reforms to the IDR plan, a senior administration official said they were still working through the "full impact" but that it was their goal.
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