Pause due to COVID: Loan repayments were halted for three years because of the pandemic. Set to resume in October.
Introducing Save: A new student loan repayment plan. Aims to refine previous income-driven repayment strategies.
Opinions on Save: Falls short of full debt forgiveness but offers significant relief. Mike Pierce of the Student Borrower Protection Center calls it "a big step forward."
What's New?: Focuses on fair interest rules. Ensures debt doesn't increase from compound interest given timely full payments.
Interest Challenge in Past: Before, consistent minimum payments often couldn't keep up with interest rates, making debt grow. Save aims to stop this.
Relief for Borrowers: Save trims the total debt for many, sometimes offering more relief than the initial plan.
Change for Married Borrowers: Previously, spouses' incomes counted towards repayment plans. Now, only the borrower's income is considered.
Help for Low-Income Borrowers: Individuals earning less than $15/hr will have a $0 monthly payment. This benefits up to an additional 1 million borrowers.
Parents Left Behind: Parents using Parent Plus loans for their children's education won't see benefits. They face the same monthly payments.
Looking Ahead: Loans will be forgiven after 25 years max. More student loan system modifications are expected next summer.