Thank You for Taking Action to Improve Income-Driven Repayment!
Last month, we asked you to weigh in on REPAYE, the Department of Education’s proposed new income-driven repayment plan. It would let all federal Direct Loan borrowers cap their monthly payments at 10% of their discretionary income, but some borrowers would have to repay for 25 years – instead of 20 – before any remaining debt could be forgiven.
Nearly 2,500 of you told the Department that 20 years of payments is long enough – thanks so much for speaking out! We’ll let you know what happens when the plan is finalized and becomes available later this year.
New Legislation Would Simplify, Improve IDR Repayment and Enrollment
Oregon Senator Jeff Merkley recently introduced two bills that would greatly simplify and improve income-driven repayment (IDR) for federal student loan borrowers, including several fixes TICAS has called for. The Access to Fair Financial Options for Repaying Debt (AFFORD) Act would replace multiple current IDR options with a single plan that caps payments at 10% of discretionary income, forgives remaining debt after 20 years, and better targets benefits. The second bill, the Income-Based Repayment Debt Forgiveness Act, would prevent the taxation of debt forgiven through IDR plans. These bills’ much-needed reforms would simplify and broaden access to income-driven payments for those who want them, and ensure borrowers aren’t hit with huge tax bills down the line.