Biden Puts Forward New Student Loan Payment Proposal

New plan could reduce payments for future borrowers by 40 percent, or as much as 83 percent for low-income borrowers
MEXICO CITY, MEXICO - JANUARY 09: U.S. President Joe Biden looks on during a welcome ceremony as part of the '2023 North American Leaders' Summit at Palacio Nacional on January 09, 2023 in Mexico City, Mexico. President Lopez Obrador, USA President Joe Biden and Canadian Prime Minister Justin Trudeau gather in Mexico from January 9 to 11 as part of the 10th North American Leaders' Summit. The agenda includes topics on the climate change, immigration, trade and economic integration, security among others. (Photo by Hector Vivas/Getty Images)

At a glance

  • The Department of Education released a new student loan payment proposal on Tuesday that would decrease or pause the payments for American borrowers.
  • Under the proposed regulations, borrowers making less than $30,600 — or families of four who make less than $62,400 annually — would be allowed to effectively pause their payments.
  • For undergraduate loans held by borrowers that make more than the aforementioned amounts, monthly payments would be cut in half.
  • The new income-driven repayment plan would save nearly $2,000 for a typical graduate of a four-year public university compared to the current income-driven repayment plan.

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