Blog Post | December 19, 2019

New Law Makes Changes to Student Loan Repayment: What Borrowers Need to Know

Author: Michele Streeter

President Trump today signed into law the FUTURE Act, an important piece of bipartisan legislation that will make it easier for students and families to apply for federal financial aid.

The bill also makes key improvements for student loan borrowers by making it simpler to access affordable student loan repayment options.

See below for what this law might mean for you if you’re repaying federal student loans.


What does this new law mean for me if I’m currently repaying student loans?

This bill will make the repayment process smoother for student loan borrowers who choose to make monthly payments based on their income.

Income-driven repayment (often referred to simply as “IDR”) plans cap your federal student loan payments at a percentage of your income. For many borrowers, these plans can help make monthly payments more manageable. If your income is very low, payments can be $0 per month.

IDR also ensures that there’s a light at the end of the tunnel: if you haven’t fully paid off your loans after 20 or 25 years of payments (depending on the plan), the remaining debt is forgiven.

If you’re currently repaying federal student loans and you are enrolled in an IDR plan, you may be familiar with the annual certification process that you need to complete to keep your payments based on your income. This annual process requires you to submit a form with information about your income and family size that allows the Education Department and its contracted student loan servicers to determine your monthly payment amount.

This new law means that you can instead choose to have this information — which is already shared with the IRS annually when you file your taxes — automatically shared with the Education Department. You will only need to opt into this process once, and as long as you’d like to stay enrolled in an income-driven plan, you will no longer need to complete an annual re-certification process. You can choose to opt out of this automatic process at any time.

When will I be able to opt into this automatic enrollment?

The law doesn’t specify a date on which the federal government must make the opt-in available, but the federal agencies in charge of the law have previously indicated that they have been preparing to implement it, so it should be ready to go soon.

We will share more information on this as soon as it becomes available. In the meantime, be sure to pay close attention to any communications from your loan servicer.

I’m not currently enrolled in an income-driven repayment plan, but I’d like to be. What do I need to do to make the switch?

If you’re repaying your student loans on a non-income-based plan and would prefer to make monthly payments based on your income, you should contact your loan servicer and ask that you be enrolled in an income-driven plan.

If you’re not sure who your loan servicer is, you can look it up through the National Student Loan Data System.

And, if you’re not sure which plan is right for you, if you experience difficultly with enrolling in an income-based plan, or if you’re still struggling with a repayment issue, check out these resources from the National Consumer Law Center’s Student Loan Borrower Assistance Project.