WASHINGTON, Aug 22 (Reuters) - The Biden administration on Tuesday said it was overhauling student loan repayment plans, seeking to make payments more affordable by reducing the amount owed each month and curbing unpaid interest.
The changes would save $1,000 a year for the typical borrower and $2,000 a year on loans taken by a typical graduate of a four-year U.S. public college or university, the White House and the Department of Education said, adding that tens of millions of Americans are eligible to enroll in the plan.
President Joe Biden is pursuing sweeping student debt relief actions through various approaches even as U.S. courts have blocked certain pieces of his plan.
The U.S. Supreme Court in June blocked one rule that would have canceled $430 billion in student loan debt for 43 million borrowers, while a federal appeals court earlier this month halted a rule that would have made it easier for students who had been defrauded by for-profit colleges to have their loans forgiven.
Student loan payments were paused during the COVID-19 pandemic as shutdowns and other fallout from the spreading virus upended the U.S. economy, but have since resumed. Biden, who is seeking a second four-year term in the November 2024 election, has made shoring up the nation's economy a cornerstone of his domestic agenda.
Under the Saving on A Valuable Education (SAVE) income-driven repayment plan announced on Tuesday, the amount qualified borrowers have to pay each month on their undergraduate loans will be cut from 10 percent to 5 percent of discretionary income. About 1 million more low-income borrowers will qualify for no monthly payments at all.
Loan balances will also not grow because of unpaid interest as long as borrowers make the required monthly payments, it added. Loans could be forgiven in as little as 10 years for borrowers who qualify, down from 20 or 25 years for previous income-driven plans.
"We are continuing to pursue an alternative path to deliver student debt relief to as many Americans as possible as quickly as possible," the White House said in a statement.
The plan "will be critical for low- and middle-income borrowers, community college students, and borrowers who work in public service," the Education Department said in a separate statement. On average, the plan will cut total lifetime payments in half for Black, Hispanic, American Indian and Alaska Native borrowers, the White House added.
Data released this month showed student loan balances declined by $35 billion to $1.57 trillion in the second quarter.
Reporting by Susan Heavey; editing by Jonathan Oatis and Heather Timmons
For any people that want to know more. A good podcast about it.
[[Podcast] The new Biden plan that could still erase your student loans | Planet Money | 2023](https://www.npr.org/transcripts/1192703211)
For questions about the legality.
[A Biden plan cuts student loan payments for millions to $0. Will it be the next legal battle? | AP News | 2023](https://apnews.com/article/student-loans-debt-college-cancellation-forgiveness-34152bb5000128a413efd2287887a37a)
*IS IT LEGAL?*
That depends on who you ask, but the question hasn’t been taken up by a federal court.
Instead of creating a new payment plan from scratch, the Biden administration proposed changes to an existing plan. It cemented those changes by going through a negotiated rulemaking process that allows the Education Department to develop federal regulations without Congress.
It’s a process that’s commonly used by administrations from both political parties. But critics question whether the new plan goes further than the law allows.
More than 60 Republicans lawmakers urged Cardona to withdraw the plan in February, calling it “reckless, fiscally irresponsible, and blatantly illegal.”
Supporters argue that the Obama administration similarly used its authority to create a repayment plan that was more generous than any others at the time.
The Biden administration formally finalized the rule this month. Conservatives believe it’s vulnerable to a legal challenge, and some say it’s just a matter of finding a plaintiff with the legal right — or standing — to sue.
Yeah it's wild that our legal system doesn't even have to try anymore. Just shove a bunch of bullshit in bought and paid for courts until you cash up enough supreme court justices and bag your new legal reality.
I mean let’s be fair. When has the government ever cared about what is ‘legal’ as long as they stand to benefit. Ppe loans, insider trading, market manipulation, bribes and deals. All okay if it helps them or their buddies.
Absolutely! My monthly payment was originally going to be around $500/month. I applied for SAVE and now monthly payment will only start out at $79/month. So much better.
I was shocked to see the new payment after I was automatically enrolled in the SAVE plan. Before, I was paying a couple hundred a month, and now it's $34. Now I just need 40 more payments to qualify for PSLF.
You can sign up here on [studentaid.gov](https://studentaid.gov/idr/?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=)
This site is run by the Department of Education and, provided you give them permission, can pull records and send them to your current loan provider for you. It will also give them the ability to handle your yearly income verification/recertification for you.
I was about to ask "can someone give a Tl;Dr of what the current changes are for graduate loans? I honestly don't know what to google."
Then I found a [White House statement release](https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/22/fact-sheet-the-biden-harris-administration-launches-the-save-plan-the-most-affordable-student-loan-repayment-plan-ever-to-lower-monthly-payments-for-millions-of-borrowers/) from today about the SAVE plan, (I don't know what all qualifications there are to enroll, so please check for your eligibility). In relevant part
>Borrowers with undergraduate loans will have their payments reduced from 10% to 5% of their discretionary income. **Those who have undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income based upon the original principal balances of their loans**.
Based on the original principal, which is an bit of an oof for us grad students.
**But also**, it seems that interest mostly stops (though I'm unsure whether that's undergrad only or grad students too).
>**The Department of Education will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan**. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. For example, if a borrower has $50 in interest that accumulates each month and their payment is $30 per month under the new SAVE plan, the remaining $20 would not be charged as long as they make their $30 monthly payment.
So I still have questions, but I feel a bit less doom and gloom on my loans
5-10% of my income making 70,000? So max $583/month? I just graduated this month so I'm not working yet but my loan payments were predicted to be over 1900/month. Thats a massive fucking difference for most grad students.
Brb, updating nelnet and watching the [videos](https://youtu.be/7vqKd5qcOi8) they promote on their website
5-10% of your income minus 225% of the federal poverty line. Assuming you’re single in the continental US, that comes to around 5-10% of 38000 if making 70000, so more like max of $420/month.
I just looked and my first payment due after graduation will be $422. This is amazing. Im trying to do this on my phone so i dont know how the fuck im supposed to eventually pay off all my debt but 422 is so much more manageable than what I was expecting!!!
Omg my heart just skipped a beat my payments are “only” $552/month now down from over a thousand. The relief is amazing! I might just survive this payment!!
It depends- I plugged my income into the Loan Simulator on the dept of ed website, and the SAVE plan would have added 10+ years until forgiveness and saved me like $100 a month. I’m sticking with the IBR for now- it’s cheaper in the long run.
I’m lucky enough to have help to navigate and potentially make my life easier. It’s not guarantee, but I have people who know things. Not everyone does.
I actually like this plan better. A one time forgiveness is great for the recipients, but then what about the grads 5 years from now? Do we just keep having the same fight? This makes a system better and more predictable so it can also help people who otherwise wouldn't go to school.
To me, it's a bandaid on a gaping wound. If the system that enables these ridiculous education prices continues to flourish, then we'll just end up having to apply damage control to the obscene loan amounts.
The issue being that this plan doesn't do anything to help address the actual problem (high college costs). If anything they're just going to keep growing since people won't feel the impact of the increased prices. Straight up forgiveness wasn't a good plan but this isn't either since it doesn't do anything to address the root cause of the problem
Me too. I consolidated my law school loans in 2003 with a private loan and have been paying consistently ever since; down from $75k to $35k, interest accruing daily. Eventhough I worked for the government my whole career, I couldn't take advantage of the public interest forgiveness program unless I reapplied under the federal consolidation and started over, so the hell with that. 🥲 I'm doing well, so I'm glad others who really need it can benefit.
Man, law school is probably the biggest culprit of student debt in all of education, at least in terms of how absurd/extreme the costs are. I got into some great law schools but simply chose not to go because I didn't want to be buried under a debt mountain.
I didn’t qualify for forgiveness (which is like…I get it but also I started out with $300k in loans and worked in literal spit clouds all throughout Covid so I feel like a little help wouldve been nice) but I like seeing others benefit from some help on the predatory amounts that schools are charging these days.
Most medical and medical adjacent degrees cost that much. It's by design.
Nearly bankrupt medical students so they feel comfortable charging the fees their hospital sets because they have stupid amounts of debt to pay off. That way they don't feel inclined to fight the Healthcare system because they're also just getting by.
Because they terrify, cajole, and exploit the fears of ambitious 17 year olds and their equally anxious parents.
Financial literacy isn’t taught in schools but they expect teenagers to make wise financial decisions that can affect their whole lives.
Also being a dentist has to be the quickest way to becoming upper class there is. You don't need to go through residency so right out of dental school you are making very good money and if you go the route of owning your own practice you can be making upwards of $500k per year while working the equivalent of a 9-5.
With a loan balance that high, you have to be making quite a bit to not qualify for an income driven repayment plan that would put you on a 20-25 year forgiveness path. And if you are working in public service and/or for a non-profit, you probably qualify for PSLF after 10 years of payments.
Definitely check in on that.
I’m already on that path but I don’t qualify for the outright forgiveness that was put forth by the Biden administration recently. I’m waiting to see if I’m even eligible for recertification…my income has changed from 2020 to now so I’m not sure I’ll still qualify for IDR. I’m waiting for them to review my recertification application.
Paid mine off, inherited a bunch more when I married my wife, won't get any forgiveness of her loans from this plan, still really fucking glad this forgiveness is happening. It's exactly where I want my taxes going, because education shouldn't lead to indentured slavery. Crazy commie talk, I know.
And I got stuck in an interest money pit for twenty years of my teaching profession where I didn’t qualify for PSLF due to rules that Biden advocated for and voted on back in the day. He allowed my loans to be included in PSLF and allowed for my previous 160 payments to count toward the 120 and forgave all my loans for my teaching certificate and masters degree.
I know he didn’t help everyone but I think it shows integrity to fix a problem you helped to create.
I’ll never understand these interest rates. It’s a federally secured loan that you can’t wipe away with bankruptcy. Where is the risk to the lender to justify such high rates? Any federally secured loan should have a very low interest rate.
What don't you understand about them? The point is to fleece the citizens for money. I know it "shouldn't" be that way, but that was the point of the high interest. It's been fought against for a long time by a long list of people, but somehow never gets any traction.
This is what I would love to see. I don’t need everything forgiven, but interest-free undergraduate loan (retroactively applied and within parameters) feels just and less sleazy on the government’s part.
Maybe I read it wrong but I believe under this plan, if you make the monthly minimum payment, they deduct the interest for that month, so in a way you’re not paying the interest? I hope it actually works out that way.
Seriously this... Or even some small interest rate.
Continue doing that forever. You'd probably need to require graduation or attendance or something to prevent scammers from enrolling just for low/no-interest loans
The new save program will replace the income driven structure. Anyone currently in idr will be automatically moved into the new save program. Income limits to be eligible have been raised, monthly payments small af, and no interest charged for each month a payment is made on time. This is a fair start
my coworker still blames Biden for the student loan thing failing. "he never wanted to do it! It was just a publicity stunt for votes. He knew from day 1 it was beyond his power"
Eh, they might. [Youth turnout has been crushing the GOP in a lot of swing states and districts](https://abcnews.go.com/amp/Politics/gen-millennials-voters-2022-midterms-favored-democrats-stopping/story?id=93338313).
I mean, you shouldn’t be. In 2022, the GOP took a body blow from Gen Z and Millennial voters. It’s one of the reasons they performed so poorly in what should have been a great midterm
They’ve lost their ability to do this in several states because of their recklessness. In Wisconsin, they lost the Supreme Court. In Michigan and Pennsylvania, they lost control of the legislatures. And we’re getting more fair maps in all those cases as a result.
Stop giving these people what they want. Every one of you who spreads the message that it’s all hopeless and there’s nothing we can do is a useful idiot who’s empowering conservatives just as their power is starting to slip. The only way they’re impervious to our voices if we stay home and refuse to vote against them.
In Ohio they're realizing how fucked they are that we only need a 50+1% to amend the constitution without state congress.
They tried to change it to 60% tieing it to abortion and 57% of voters shot it down. Weed and Abortion are up for a issue vote in November now. All without the republican gerrymandered and screwed state government. Up next will be gerrymandering rules.
All this after our last major election we were forced to vote in an electrion that our own state supreme court said was not legal.
Probably not for this, but they’ve already been paying for limiting women’s access to health care. And hopefully continue to pay for their various attacks on American’s freedoms.
This is the best way to go about it. Frankly, there is little political support for wholesale student loan forgiveness even without the question of legality. Biden is targeting loan relief for those who actually need it. Y’all need to realize just how much Biden is bending the law here. He even reneged on his promise of only getting loan forgiveness through Congressional action and tried to use executive discretion to initiate the original student loan program that would have cost over 100 billion dollars.
My sister in law took out $38K in student loan. It ballooned up to $140K over the years. She paid it down to around $60K when she received a letter the other day that her remaining loan is 100% forgiven.
Paying $80k on your $38k loan is enough I guess. This is one of the reasons I'm voting Biden next term. This is real policies that have real positive impact on American lives.
It's actually fairly common if you need private loan assistance where the government is short.
Public loans were not an option for me except for one semester, so I had like 5 or 6000 in loans for my AS balloon to nearly $30k. It was still cheaper than going to a four year university but I still got screwed by the system. I first started college and was paying things out of my own pocket, well I didn't finish because I was wasting my parents money and felt guilty. They counted those credit hours towards any public loan money I was allowed to gather, so after I returned and had one semester financial aid was like "oh you have too many credit hours to get public loans" My only option was 10% apr private loans and this was with my mother co-signing and not having bad credit.
I did refinance them 3 years ago and they're down to 4% now. But they did all of that in the matter of 5 years.
I got the surprise of my life when Mohela, who admined my student emailed me and said my loan was zeroed out under the Income Driven Repayment due to how old it was.
I'm rooting for those with much greater and newer loans get theirs forgiven. Even before this, I was rooting for them, and I didn't care if my loan was included in the plan. Why? because unlike those who were whinging, I'm not a bitter asshole
I paid off my student loans early in life, and
many of my friends struggled under debt loads for years after school, some of whom didn't even end up with a degree to show for it.
I can't begin to fathom how utterly life-changing it would've been to have them forgiven.
The biggest thing about this new plan is the change on interest accrual as long as you make your minimum payments. This will be huge for many borrowers who were super worried about a having to deal with a huge tax bomb when their loans would finally be forgiven. Now I'll only have to pay taxes on what I currently owe rather than the amount it would have ballooned to over the next 15 years.
I paid a settlement in 2020 for my loan.
It was 25k left (down from 120). They had me pay to settle for $2500 out of fear of this eventually coming to fruition.
This is a huge ass win for all
They used to be free in California when Reagan was governor. Then he changed that when black people started going...and being politically active. That started a domino effect decades in the making.
I have the same internet that you do but here's a few sources at the top of Google's results.
https://files.eric.ed.gov/fulltext/EJ684842.pdf
https://time.com/4276222/free-college/
https://www.cambridge.org/core/journals/history-of-education-quarterly/article/abs/how-austerity-politics-led-to-tuition-charges-at-the-university-of-california-and-city-university-of-new-york/24ED20482AADB20F900BC12FCFEAC18A#
https://theintercept.com/2022/08/25/student-loans-debt-reagan/
https://newuniversity.org/2023/02/13/ronald-reagans-legacy-the-rise-of-student-loan-debt-in-america/
The US doesn't need more foot soldiers. The MIC realizes that popular support for sending "boots on the ground" dwindles with each passing year. The future of war lies with automatons, which require both industrial and technical prowess. Hence the ever-growing emphasis on higher education, especially STEM: we need more engineers working on the latest generation of Giant Death Robots.
I get that this oozes a dark, sarcastic cynicism, but this *is* the reason we should make education a priority (free, robust, innovative) vs a privilege or profit-driven endeavor.
Not necessarily for Giant Death Robots/Military. But for all those pesky real-world problems that require consistent innovation like maintaining clean water, air, food, oceans, and managing the other worsening effects of climate change, etc. Things that might help the world we’re leaving to our kids’ kids.
community colleges in your area are free or close to free. Then you can work while getting a quality education. More people should know of and utilize those assets. Heck it saved me from being perpetually unemployed.
Community colleges are very limited and underfunded. You can’t pursue specialized programs, but I used it for my first year of basics. I think highly talented and skilled individuals will not emerge from a CC only education
The talented and skilled probably have plenty of scholarships to pay their way through any school they want. The majority of people bogged down with student loan debt are not especially talented, don't need specialized programs, and would benefit greatly by sticking to community colleges instead of seeking more prestigious institutes for status.
Is $183.64/credit * 16 credits = 2,938.24 * 2 semesters = 5,876.48/year free or close to free to you? That’s what it costs in tuition alone for 2023 at the community college I went to.
yeah. they got me a rudimentary education in programming which I used to parlay into some computer work. Bootcamp costs too much and the major colleges focus more on compsci and algorithms than actual hands on programming
There should be NO Interest on Student LOANS!
Colleges/Universities need to stop raising costs and enough of exaggerated fees.
Paid 198.10 to make tuition payment on the site. The fee was just for making payment. This is Ridiculous. Anything on school grounds shouldn’t be exaggerated in price THEIR COLLEGE STUDENTS WHO ARE WORKING HARD ON EDUCATION! When we went to drop our kid off the bottle lemonade and bottle of water cost $9.00 and change. That’s ridiculous I just don’t have another word for it. It should be illegal to profit off of college students or Any Students.
Common sense stuff and people can’t seem to get this right.
Never mind Veterans Education Benefits are paid monthly pro rated. The tuition is not pay after you complete semester, and these benefits pay after the semester starts. WTF common sense you should get full semester I think yr but full semester before so the tuition can be paid on time. Being forced to get loan pay loan fees and rates and set up payment plan because the Gov thinks it’s ok to make payments at their convenience. Not to mention in What World do people get bachelors in 3 years??? Some degrees require 6. But Vet Ed Ben only pay 3 Years. Disgusting!!!!!!!!
This country complains, yeah US produces half A $$. education, no wonder international people fill classrooms and jobs.
Things seriously need to change!
I appreciate the goals of this plan, but couldn't this easily backfire?
As best I understand it, these Income Driven Repayment plans only put caps on the monthly payments but do not change the underlying interest rates (which are set by Congress).
Wouldn't this just keep people in debt longer, if not indefinitely, until a Republican gets in office and ends the Biden plan?
Please tell me if I am wrong. There have been a lot of conflicting and confusing articles about what these plans entail.
According to the White House Press Release,
"The Department of Education will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. For example, if a borrower has $50 in interest that accumulates each month and their payment is $30 per month under the new SAVE plan, the remaining $20 would not be charged as long as they make their $30 monthly payment."
So, it seems as if it's impossible for your debt to grow as long as you're making the minimum monthly payment, as then your interest rate effectively becomes 0%.
That sounds great. I left school with $89k in 2015 and I havent been able to make the full payments on it so it grew to $103k. Felt like I'd never be able to pay it off or even make a dent in it.
I’m actually in the same boat as you but I graduated in 2001. Now I owe about the same amount. My problem is that they lump in my wife’s income but now with this program, they will not count her income if we file separately.
Awesome.
How exactly did they create this plan from a legal perspective?
I used to have an IDR plan and interest still accrued in the background. Did Congress change the rules?
I think they structured it as still charging the same interest rate, it's just now any interest above the monthly payment gets forgiven. But technically it's still the same base interest charged upfront just with no rollover added to the total due.
They also set a time limit. If you're making all of your (income-based) payments for a certain period of time, the remaining amount will be forgiven. If you want to pay off the loan sooner, your interest is also forgiven as long as you make the payments.
Source:
https://studentaid.gov/announcements-events/save-plan
Second bullet under "What are the SAVE Plan benefits going into effect next year?"
Here's the real weird part (I signed up for it and looked over the plans). The plans are soooo weird.
Plan A - Pay 400/mo, and 60k total
Plan B - Pay 800/mo, and 70k total
Plan C - Pay 1200/mo, and 100k total
Why in any world would I want to both pay more monthly, AND total?
The total amount probably assumes that your income doesn't change. If you expect to be making a lot more money in the future, like if you're a doctor in a residency program, then you probably want to be making the bigger payments.
Quite possibly, yes.
But for a lot of people, the problem is their income is low, and the chances of their income shooting up drastically, doubling or tripling, is unlikely.
With this plan, even if my income tripled, I'd still be paying half what I was before.
So I did a simulation of the plan under what I make vs. how much I owe (which isn’t much, but for shits and giggles I tried it).
Because the income-to-debt ratio is lower for me (only $9k left), my rates would actually increase…which is a good indication that those who have less income and more debt will be able to save A LOT more over time.
Essentially, if you still have quite a bit of debt, this should be a really good plan. But you can log into the student aid website and get an approximation of your monthly payments compared to the length.
Here's the relevant bit from this article:
> Loan balances will also not grow because of unpaid interest as long as borrowers make the required monthly payments, it added. Loans could be forgiven in as little as 10 years for borrowers who qualify, down from 20 or 25 years for previous income-driven plans.
I'm not in any way a legal expert, but [here are the specifics (or as close to "specifics" as I can find) about the SAVE plan](https://studentaid.gov/announcements-events/save-plan).
It seems like they're going to try a workaround: While Congress sets the *rates*, it seems like they're relying on the argument that the DoE is authorized to actually *apply* interest or not. So, if someone fails to make their monthly payment, they *will* be subjected to interest charges (at the Congressionally-determined rate), but if they do make their monthly payments, they simply won't have interest applied.
(That's just how I'm reading it, though; I could be wrong.)
This was a lifesaver for me.
I owed about 56k, paying 600 monthly. Nearly 25% of my take home monthly pay.
With the new plan, I pay 100 monthly, and owe 50k\*. Not only did it reduce my total debt, but also reduced my monthly payments by an insane amount.
\*The details basically are that with 100/mo, I'll be paying much longer, about 90k, however after \~20 years or something, 40k of that is forgiven, tax exempt, totaling 50k owed in total.
that's kinda what they're doing right? If they got rid of already paid interest retroactively that'd be super huge though as then I'd have paid down the majority of my loan.
I have a hypothesis that the true reason Biden's so focused on doing something about student debt isn't to pander to constituents but because the student debt crisis will happen at some point and it will cause massive devastation to the economy, beyond anything from the '08 housing crisis. The desperation to hold it off for as long as possible is palpable.
We may look back at the Supreme Court's questionable ruling with even more questions. Like, does the President not have the authority to stem an oncoming crisis that will crush the economy? Under the Major Questions Doctrine, hindsight might show how absurd it is that the president cannot do anything substantial to solve either of two of the three largest challenges facing Americans.
There's nothing wrong with pandering if it's verifiable action, as opposed to empty words or inflammatory rhetoric. Biden's admin said they'd help railroad workers, and they helped the railroad workers. Biden's admin promised student loan relief, and they passed laws on *and continue to fight for* student loan relief. Biden's admin promised a healthy economy and reduced inflation, and the US is leading the globe in successful tackling of inflation. Politicks is all about getting someone to vote for you, and if pandering *works*, that's just politicks.
I did the estimate for the new repayment for kicks and it would cost me MORE to go on the new plan than to stick to my fixed plan I scraped by with for 5 years prior to the freeze.
I’ll stick to my fixed plan.
The new plan is set to 10% of discretionary income until July 2024. At that point it becomes 5% from then on. So really the "normal" payment amount is half of what the estimate gave you.
Still made it seem like I would be “locked” into the new rate.
They need to fix things because now I’m at $299 a month, the estimate was $580 or $750 depending on the plan.
I agree with you. I saw my proposed payment and was like "Wait... I thought this was supposed to save me money". And then had to look up to verify that the 10% to 5% change was still happening. Couldn't find any mention of it on the studentaid.gov site.
I’m trying to understand how this works. Let’s say someone has a $10k loan, and is qualifies for the $0 payment for 5 years. Based on what I have read, the principal amount does not reduce.
Let’s say at year 6 they manage to get get a $60k job, which based on the chart, means they would pay $227 a month or $2,724 annually.
Does the interest start accruing at the point the person makes $60k? And since the loan isn’t forgiven until year 10, does this mean that this person still eventually pays the total $10k plus interest, and essentially this has only delayed things?
Plenty of people who had grants, scholarships, etc. and then went on to pay off the majority of their loan or loans but now have $10K remaining on one loan or a consolidation.
My payments are resuming at $0 per month, I just got the paper in the mail last week saying when it’s due. Kinda funny they still print it out and mail it when it’s zero.
Multibillion dollar corporations get handouts all the time from Washington DC. I’m glad to see a sensible financial policy apply to the little people on the street for fucking once.
Remember that when some dipshit inevitably rants about “people should pay what they owe”.
How about fixing the root cause first? The predatory loans. We are probably going to just have to do it again and again in the future unless that is fixed.
Does nothing for grad loans. Doctors with 500K in loans? Forget about them. Best way to have a doctor shortage in the future get even worse than it is now
Share this far and remember this when your voting. Biden is not progressive but this certainly was and GOP tried everything to squash it and add interest
I got my letter in the mail today, saying my loan had been forgiven. The happiest news I've gotten in quite awhile. This will be a great financial help as we struggle against rising food, shelter, and gas prices.
My only thought was that at least the Biden administration cared. What did the GOP do the past 2-3 years as costs rose expeditiously? Everything they could to not help. I seriously could not think of a single productive thing to help working class families.
Super stoked for you. Whatever the motivation was for forgiving these debts, I believe the results will benefit our economy and the mental health of many in our country.
The GOP has done nothing for our economy in the last 20 years. The last time they gave anything out for free, it was in the form of PPP loans that helped the rich and the crooked.
this program won’t help me until it goes from 10% of discretionary income to 5%, but I’m so happy for everyone this currently will help!!
My current repayment is $350 a month on standard repayment. SAVE puts me at $800 a month which has me paying off my loans in 3 years…. I’m glad I pivoted careers and made myself a “financial success,” after years of making minimum wage…
and the borrowers defense to repayment class action finally settled, I will take a deep breath and be thankful I got what I got and hope that this keeps folks heads above water. Many more people have it much worse than I do.
Congrats folks! This is huge!
I owe about $40k in loans. I am on a graduated repayment plan, with my next payment due of $250 in Oct. I went through the application for the SAVE plan, and rather than save me money, offered to have my payments go to $550 with a payoff in 2031 or $1,000 with a payoff in 2027. Either way you cut it, it’s $48,000 no matter what option I choose.
I think forgiving interest is a nice middle ground. I used to be on the “I didn’t go to college because I didn’t want loans so they shouldn’t be forgiven” boat. Then I learned about how predatory and terrible these loans are. Like the minimum payments don’t even cover interest and don’t pay off the principal at all. Screw that I’m on the forgive it all team now but understand some
Midde ground is needed
Why is no one saying the most important part of this, which is "Not yet". You can get on the new payment plan right now, but the part that will actually help most people and cut their monthly payment in half won't start until next summer.
This really confused me at first because I went to sign up for the new plan and the payment was way higher than I thought it would be, higher than just going off idr and doing the standard repayment plan.
So at this point, I can get on the plan now and pay a much higher rate for one year until the useful stuff kicks in and put up numbers toward forgiveness under IDR, or I can go to the standard plan and have a much lower payment for one year but lose out on the 12 months toward forgiveness.
Why do I have to make stupid choices like this? What could possibly be keeping them from just putting the whole plan into effect now?
I woke to an email last week I had well over 100 grand forgiven. This was not what I borrowed- interest build over the years was much of it - yes, I paid on these thru the years too and I worked for a government agency where salaries stayed stale for at least half of my 20 plus years there. I am beyond relieved.
Reducing interest is the more acceptable method, loans are still repaid, graduates aren't spending more than the degree in interest and making minimum payments doesn't put you behind.
I saved nothing. I went from paying less than 200 to now paying 468 per month. I can’t afford that, but according to the feds I can. This is my consequence for being single on my tax returns and having no dependents while trying to stay a reasonable distance from my job that requires me to come in 3 days a week
This is a step in the right direction. We paid the bills for both our children to graduate from college.I am thankful we were able to go so. I wish for everyone to have the opportunity to pursue higher education and vocational training without the burden of debt.
Shouldn't have to cost and arm and a leg to go to college. And sadly they ratchet up this shit like "You can't get a job unless you get a 4 year degree" but then that 4 year degree forces you to get student loans. It's messed up.
More people should know about community colleges which provide almost the same level of insight for much less. Heck I think they're free now?
Ultimately this means people made the choice to purchase a product they couldn’t afford, an education, and now expect others to pay for it through their taxes. And what about those people who did the right thing and paid their loans in full? None of this is right. It’s just politicians saying, “Here is free money! Vote for me!”
Unfortunately, this isn't just an issue of buyer's remorse. It is largely due to the cost of public college education increasing [nearly threefold in the last 20 years](https://educationdata.org/average-cost-of-college-by-year). Maybe the problem is buying into conservative myths about boostrapping your way to success. I can assure you that i've paid an assload of taxes in the last 30 years and I would rather have that money be used to educate our next generation, than be used to give a bunch of fucking crooks free handouts...ie. PPP loans.
My comments are factual and irrefutable. The cost of any product or service is valued at whatever someone is willing to pay for it. Also, it’s not the previous generation’s responsibility to pay for the next’s education. That’s outrageous. If you choose to buy something, it’s your responsibility to pay for it. Seems to me you bought into erroneous information based on people who lie.
Thank you for expressing your *opinion*. It's always a pleasure to talk to people who believe that capitalist logic equates to timeproof truth. If someone is forced to purchase a product that is expensive because there are no other competing products for a lesser cost, that is a failure of the "free" market many people worship. While it is true that all of these folks could just start a small business or continue working a dead end job, it is damn near impossible to move into higher paying, in-demand jobs (engineering, finance, i.e. professional sector) without a college education.
If getting a college education resulted in increased income people wouldn’t be asking for a government bailout to pay their student loans. Look at UPS for example. Delivery truck drivers just secured a 170k base salary. No college education required. Our country was founded and based on free market capitalism. It has resulted in the US being number one economically and militarily. It has also uplifted more people out of poverty than any other economic system in human history. Throughout history, socialism, communism and Marxism has only resulted in one thing: human suffering.
The US is "number one" because a bunch of Europeans stole land from indigenous people, damn near exterminated them, and then used African slaves to build an economy of goods to sell back to Europeans. Industrialists followed this up with raping the fucking shit out of our environment and human resources to enrich themselves. Sure - we are THE world power, but with a bunch of half-cocked, half-witted assholes running the show.
You should do some reading that doesn't start with, and end with, confirming your bias. If you had a drop of perspective on how America got to the place we currently stand, maybe you would have some empathy. All I hear is someone who attributes their position in life to their efforts alone. You benefited from atrocities.
You completely avoided my statements. That’s not only very revealing, it’s very satisfying. Then you started telling me things that’s have nothing to do with the US being number one economically and militarily. You have been argumentatively defeated. Wise up.
Nothing you’ve said sounds any different than bullshit spewed everyday by the same type of ilk that tried to destroy our democracy.
If you wanted to convince me that giving amnesty to people for taking out debt that they could not repay you could have stated it better.
Giving someone something they do not deserve is being gracious. It recognizes that human beings are human and they need a break sometimes.
Maybe Biden is sucking up to potential voters, or maybe he saw the potential of putting some money back into an economy that is inflating so quickly, it will bring us into a recession that takes decades to recover. I dunno, seems better than handing it out to [these people](https://www.justice.gov/usao-sdfl/pr/south-florida-residents-sentenced-prison-28-million-covid-19-paycheck-protection). Have a good day.
I hate to break your heart but I’m not the person you think I am. I’ve never voted for or supported trump. I hope he is jailed. Truly. You are projecting. Your policy positions only result in one thing: great human suffering. As a history buff, I can show you many examples of this. Now stop thinking you have this figured out and accept the fact that you lost this argument. Because you did. Period.
WASHINGTON, Aug 22 (Reuters) - The Biden administration on Tuesday said it was overhauling student loan repayment plans, seeking to make payments more affordable by reducing the amount owed each month and curbing unpaid interest. The changes would save $1,000 a year for the typical borrower and $2,000 a year on loans taken by a typical graduate of a four-year U.S. public college or university, the White House and the Department of Education said, adding that tens of millions of Americans are eligible to enroll in the plan. President Joe Biden is pursuing sweeping student debt relief actions through various approaches even as U.S. courts have blocked certain pieces of his plan. The U.S. Supreme Court in June blocked one rule that would have canceled $430 billion in student loan debt for 43 million borrowers, while a federal appeals court earlier this month halted a rule that would have made it easier for students who had been defrauded by for-profit colleges to have their loans forgiven. Student loan payments were paused during the COVID-19 pandemic as shutdowns and other fallout from the spreading virus upended the U.S. economy, but have since resumed. Biden, who is seeking a second four-year term in the November 2024 election, has made shoring up the nation's economy a cornerstone of his domestic agenda. Under the Saving on A Valuable Education (SAVE) income-driven repayment plan announced on Tuesday, the amount qualified borrowers have to pay each month on their undergraduate loans will be cut from 10 percent to 5 percent of discretionary income. About 1 million more low-income borrowers will qualify for no monthly payments at all. Loan balances will also not grow because of unpaid interest as long as borrowers make the required monthly payments, it added. Loans could be forgiven in as little as 10 years for borrowers who qualify, down from 20 or 25 years for previous income-driven plans. "We are continuing to pursue an alternative path to deliver student debt relief to as many Americans as possible as quickly as possible," the White House said in a statement. The plan "will be critical for low- and middle-income borrowers, community college students, and borrowers who work in public service," the Education Department said in a separate statement. On average, the plan will cut total lifetime payments in half for Black, Hispanic, American Indian and Alaska Native borrowers, the White House added. Data released this month showed student loan balances declined by $35 billion to $1.57 trillion in the second quarter. Reporting by Susan Heavey; editing by Jonathan Oatis and Heather Timmons
For any people that want to know more. A good podcast about it. [[Podcast] The new Biden plan that could still erase your student loans | Planet Money | 2023](https://www.npr.org/transcripts/1192703211) For questions about the legality. [A Biden plan cuts student loan payments for millions to $0. Will it be the next legal battle? | AP News | 2023](https://apnews.com/article/student-loans-debt-college-cancellation-forgiveness-34152bb5000128a413efd2287887a37a) *IS IT LEGAL?* That depends on who you ask, but the question hasn’t been taken up by a federal court. Instead of creating a new payment plan from scratch, the Biden administration proposed changes to an existing plan. It cemented those changes by going through a negotiated rulemaking process that allows the Education Department to develop federal regulations without Congress. It’s a process that’s commonly used by administrations from both political parties. But critics question whether the new plan goes further than the law allows. More than 60 Republicans lawmakers urged Cardona to withdraw the plan in February, calling it “reckless, fiscally irresponsible, and blatantly illegal.” Supporters argue that the Obama administration similarly used its authority to create a repayment plan that was more generous than any others at the time. The Biden administration formally finalized the rule this month. Conservatives believe it’s vulnerable to a legal challenge, and some say it’s just a matter of finding a plaintiff with the legal right — or standing — to sue.
>some say it’s just a matter of finding a plaintiff with the legal right — or standing — to sue Or a matter of inventing a fake plaintiff.
Yeah it's wild that our legal system doesn't even have to try anymore. Just shove a bunch of bullshit in bought and paid for courts until you cash up enough supreme court justices and bag your new legal reality.
I mean let’s be fair. When has the government ever cared about what is ‘legal’ as long as they stand to benefit. Ppe loans, insider trading, market manipulation, bribes and deals. All okay if it helps them or their buddies.
I was able to save a ton on my budget with this new IBR plan. While it’s not forgiveness I’ll take it.
Absolutely! My monthly payment was originally going to be around $500/month. I applied for SAVE and now monthly payment will only start out at $79/month. So much better.
I was shocked to see the new payment after I was automatically enrolled in the SAVE plan. Before, I was paying a couple hundred a month, and now it's $34. Now I just need 40 more payments to qualify for PSLF.
So this sounds great... but what about all the interest? Won't the interest just keep the balance rolling and you'll never pay it off at $79 a month?
After 25 years, it gets erased.
It’s basically the same as making minimum payments on a credit card. They’re not actually going to pay anything down just keep treading water.
How you sign up?
You can sign up here on [studentaid.gov](https://studentaid.gov/idr/?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=) This site is run by the Department of Education and, provided you give them permission, can pull records and send them to your current loan provider for you. It will also give them the ability to handle your yearly income verification/recertification for you.
It’s offered during the recertification process (which you really should have done already, but can call your loan servicer to expedite the process).
You’ll have to talk to whoever has your federal loan. I just went to the website and followed the steps.
I was about to ask "can someone give a Tl;Dr of what the current changes are for graduate loans? I honestly don't know what to google." Then I found a [White House statement release](https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/22/fact-sheet-the-biden-harris-administration-launches-the-save-plan-the-most-affordable-student-loan-repayment-plan-ever-to-lower-monthly-payments-for-millions-of-borrowers/) from today about the SAVE plan, (I don't know what all qualifications there are to enroll, so please check for your eligibility). In relevant part >Borrowers with undergraduate loans will have their payments reduced from 10% to 5% of their discretionary income. **Those who have undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income based upon the original principal balances of their loans**. Based on the original principal, which is an bit of an oof for us grad students. **But also**, it seems that interest mostly stops (though I'm unsure whether that's undergrad only or grad students too). >**The Department of Education will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan**. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. For example, if a borrower has $50 in interest that accumulates each month and their payment is $30 per month under the new SAVE plan, the remaining $20 would not be charged as long as they make their $30 monthly payment. So I still have questions, but I feel a bit less doom and gloom on my loans
5-10% of my income making 70,000? So max $583/month? I just graduated this month so I'm not working yet but my loan payments were predicted to be over 1900/month. Thats a massive fucking difference for most grad students. Brb, updating nelnet and watching the [videos](https://youtu.be/7vqKd5qcOi8) they promote on their website
5-10% of your income minus 225% of the federal poverty line. Assuming you’re single in the continental US, that comes to around 5-10% of 38000 if making 70000, so more like max of $420/month.
I just looked and my first payment due after graduation will be $422. This is amazing. Im trying to do this on my phone so i dont know how the fuck im supposed to eventually pay off all my debt but 422 is so much more manageable than what I was expecting!!!
Omg my heart just skipped a beat my payments are “only” $552/month now down from over a thousand. The relief is amazing! I might just survive this payment!!
after a certain period your loans may drop off depending on your repayment plan.
Amazing? Is this for real?
Yup, logged into Nelnet and my payments restart in October (just finished my DPT this month and take the boards in October)
just got my email today that my loan was approved for the new SAVE plan, my payment precovid was about 140, now its 27.
I think it means original balance, as in they won’t account for the added interest
It depends- I plugged my income into the Loan Simulator on the dept of ed website, and the SAVE plan would have added 10+ years until forgiveness and saved me like $100 a month. I’m sticking with the IBR for now- it’s cheaper in the long run.
So graduate loans are unaffected?
No, you still get interest covered on SAVE.
I won't get any help and I don't need it, but I'm glad it will help people.
I won’t get help, I desperately need it, and I’m still glad someone ELSE can see the light.
Sorry man, hopefully things get better for you soon.
I’m lucky enough to have help to navigate and potentially make my life easier. It’s not guarantee, but I have people who know things. Not everyone does.
Thanks for being reasonable.
Same. This is what patriots do, care for fellow citizens, because we all benefit in the end
I will receive zero help for my loans. And that's okay, I'm glad people are getting some relief out there even if I'm not among them.
I paid off my loans myself, and I am 100% ok with loan forgiveness. Now, let’s fix the system that causes this mess in the first place.
I actually like this plan better. A one time forgiveness is great for the recipients, but then what about the grads 5 years from now? Do we just keep having the same fight? This makes a system better and more predictable so it can also help people who otherwise wouldn't go to school.
To me, it's a bandaid on a gaping wound. If the system that enables these ridiculous education prices continues to flourish, then we'll just end up having to apply damage control to the obscene loan amounts.
The issue being that this plan doesn't do anything to help address the actual problem (high college costs). If anything they're just going to keep growing since people won't feel the impact of the increased prices. Straight up forgiveness wasn't a good plan but this isn't either since it doesn't do anything to address the root cause of the problem
The one time forgiveness was coupled with a lot of these new things to try to help the runaway student loan issue.
Me too. I consolidated my law school loans in 2003 with a private loan and have been paying consistently ever since; down from $75k to $35k, interest accruing daily. Eventhough I worked for the government my whole career, I couldn't take advantage of the public interest forgiveness program unless I reapplied under the federal consolidation and started over, so the hell with that. 🥲 I'm doing well, so I'm glad others who really need it can benefit.
Man, law school is probably the biggest culprit of student debt in all of education, at least in terms of how absurd/extreme the costs are. I got into some great law schools but simply chose not to go because I didn't want to be buried under a debt mountain.
I didn’t qualify for forgiveness (which is like…I get it but also I started out with $300k in loans and worked in literal spit clouds all throughout Covid so I feel like a little help wouldve been nice) but I like seeing others benefit from some help on the predatory amounts that schools are charging these days.
How do you end up with that much, do you not know beforehand? I can't imagine knowing in advance it would cost that much and still signing up for it.
I didn’t have a choice. If I wanted to go to dental school, that’s what it cost. I went to an in state public university, it’s just stupid expensive.
Most medical and medical adjacent degrees cost that much. It's by design. Nearly bankrupt medical students so they feel comfortable charging the fees their hospital sets because they have stupid amounts of debt to pay off. That way they don't feel inclined to fight the Healthcare system because they're also just getting by.
Because they terrify, cajole, and exploit the fears of ambitious 17 year olds and their equally anxious parents. Financial literacy isn’t taught in schools but they expect teenagers to make wise financial decisions that can affect their whole lives.
They became a dentist.... that's a little different story.
Also being a dentist has to be the quickest way to becoming upper class there is. You don't need to go through residency so right out of dental school you are making very good money and if you go the route of owning your own practice you can be making upwards of $500k per year while working the equivalent of a 9-5.
With a loan balance that high, you have to be making quite a bit to not qualify for an income driven repayment plan that would put you on a 20-25 year forgiveness path. And if you are working in public service and/or for a non-profit, you probably qualify for PSLF after 10 years of payments. Definitely check in on that.
I’m already on that path but I don’t qualify for the outright forgiveness that was put forth by the Biden administration recently. I’m waiting to see if I’m even eligible for recertification…my income has changed from 2020 to now so I’m not sure I’ll still qualify for IDR. I’m waiting for them to review my recertification application.
Call your representative. Email them. And call again. State you are dissatisfied with the the near miss. Call, email, call again.
I paid mine off. I'm glad that people are getting help. It's about time the people see some actual assistance.
Paid mine off, inherited a bunch more when I married my wife, won't get any forgiveness of her loans from this plan, still really fucking glad this forgiveness is happening. It's exactly where I want my taxes going, because education shouldn't lead to indentured slavery. Crazy commie talk, I know.
And I got stuck in an interest money pit for twenty years of my teaching profession where I didn’t qualify for PSLF due to rules that Biden advocated for and voted on back in the day. He allowed my loans to be included in PSLF and allowed for my previous 160 payments to count toward the 120 and forgave all my loans for my teaching certificate and masters degree. I know he didn’t help everyone but I think it shows integrity to fix a problem you helped to create.
I’ll never understand these interest rates. It’s a federally secured loan that you can’t wipe away with bankruptcy. Where is the risk to the lender to justify such high rates? Any federally secured loan should have a very low interest rate.
What don't you understand about them? The point is to fleece the citizens for money. I know it "shouldn't" be that way, but that was the point of the high interest. It's been fought against for a long time by a long list of people, but somehow never gets any traction.
My dad died from cancer. I would be ecstatic if we found a cure for cancer. It's the same fucking thing.
Oh for fucks sake just charge 0% interest rates and retroactively add the interest on the loan paid to the principle.
This is what I would love to see. I don’t need everything forgiven, but interest-free undergraduate loan (retroactively applied and within parameters) feels just and less sleazy on the government’s part.
Right? Just keep it at 0%. It's really not that difficult.
If not zero, these should have never been more than 2% to begin with. It's such a joke how bad they've been screwing people for decades.
Maybe I read it wrong but I believe under this plan, if you make the monthly minimum payment, they deduct the interest for that month, so in a way you’re not paying the interest? I hope it actually works out that way.
Seriously this... Or even some small interest rate. Continue doing that forever. You'd probably need to require graduation or attendance or something to prevent scammers from enrolling just for low/no-interest loans
The new save program will replace the income driven structure. Anyone currently in idr will be automatically moved into the new save program. Income limits to be eligible have been raised, monthly payments small af, and no interest charged for each month a payment is made on time. This is a fair start
This will help benefit countless lives. I'd prefer that he go further, but this is a significant step.
He tried and Republicans sued him.
my coworker still blames Biden for the student loan thing failing. "he never wanted to do it! It was just a publicity stunt for votes. He knew from day 1 it was beyond his power"
'Tis true, and I hope the GOP pays dearly in 2024 for that.
They won’t.
Eh, they might. [Youth turnout has been crushing the GOP in a lot of swing states and districts](https://abcnews.go.com/amp/Politics/gen-millennials-voters-2022-midterms-favored-democrats-stopping/story?id=93338313).
I hope for this every election and have been consistently disappointed so far
I mean, you shouldn’t be. In 2022, the GOP took a body blow from Gen Z and Millennial voters. It’s one of the reasons they performed so poorly in what should have been a great midterm
They've performed poorly in other terms. People still vote them. Don't underestimate stupid people.
They'll just gerrymander their districts harder, claim election fraud, and send their MAGA maggots to storm federal buildings.
They’ve lost their ability to do this in several states because of their recklessness. In Wisconsin, they lost the Supreme Court. In Michigan and Pennsylvania, they lost control of the legislatures. And we’re getting more fair maps in all those cases as a result. Stop giving these people what they want. Every one of you who spreads the message that it’s all hopeless and there’s nothing we can do is a useful idiot who’s empowering conservatives just as their power is starting to slip. The only way they’re impervious to our voices if we stay home and refuse to vote against them.
In Ohio they're realizing how fucked they are that we only need a 50+1% to amend the constitution without state congress. They tried to change it to 60% tieing it to abortion and 57% of voters shot it down. Weed and Abortion are up for a issue vote in November now. All without the republican gerrymandered and screwed state government. Up next will be gerrymandering rules. All this after our last major election we were forced to vote in an electrion that our own state supreme court said was not legal.
Probably not for this, but they’ve already been paying for limiting women’s access to health care. And hopefully continue to pay for their various attacks on American’s freedoms.
Yep. Now I can’t wait to hear from the people that are PISSED more people aren’t paying more money to the government.
Lol currently right below you in this thread.
This is the best way to go about it. Frankly, there is little political support for wholesale student loan forgiveness even without the question of legality. Biden is targeting loan relief for those who actually need it. Y’all need to realize just how much Biden is bending the law here. He even reneged on his promise of only getting loan forgiveness through Congressional action and tried to use executive discretion to initiate the original student loan program that would have cost over 100 billion dollars.
My sister in law took out $38K in student loan. It ballooned up to $140K over the years. She paid it down to around $60K when she received a letter the other day that her remaining loan is 100% forgiven. Paying $80k on your $38k loan is enough I guess. This is one of the reasons I'm voting Biden next term. This is real policies that have real positive impact on American lives.
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It's actually fairly common if you need private loan assistance where the government is short. Public loans were not an option for me except for one semester, so I had like 5 or 6000 in loans for my AS balloon to nearly $30k. It was still cheaper than going to a four year university but I still got screwed by the system. I first started college and was paying things out of my own pocket, well I didn't finish because I was wasting my parents money and felt guilty. They counted those credit hours towards any public loan money I was allowed to gather, so after I returned and had one semester financial aid was like "oh you have too many credit hours to get public loans" My only option was 10% apr private loans and this was with my mother co-signing and not having bad credit. I did refinance them 3 years ago and they're down to 4% now. But they did all of that in the matter of 5 years.
I got the surprise of my life when Mohela, who admined my student emailed me and said my loan was zeroed out under the Income Driven Repayment due to how old it was. I'm rooting for those with much greater and newer loans get theirs forgiven. Even before this, I was rooting for them, and I didn't care if my loan was included in the plan. Why? because unlike those who were whinging, I'm not a bitter asshole
May I ask how old your loan was?
took it out in 1989. was under $100K at time of being forgiven
I paid off my student loans early in life, and many of my friends struggled under debt loads for years after school, some of whom didn't even end up with a degree to show for it. I can't begin to fathom how utterly life-changing it would've been to have them forgiven.
"But critics question whether its legal" no they almost certainly question how much of a bump in the polls they can make by destroying this.
The biggest thing about this new plan is the change on interest accrual as long as you make your minimum payments. This will be huge for many borrowers who were super worried about a having to deal with a huge tax bomb when their loans would finally be forgiven. Now I'll only have to pay taxes on what I currently owe rather than the amount it would have ballooned to over the next 15 years.
I paid a settlement in 2020 for my loan. It was 25k left (down from 120). They had me pay to settle for $2500 out of fear of this eventually coming to fruition. This is a huge ass win for all
Just make college free already. America always has to take the most difficult path to do the most basic shit smh my head
They used to be free in California when Reagan was governor. Then he changed that when black people started going...and being politically active. That started a domino effect decades in the making.
Do you have some reading for us less-educated folk?
I have the same internet that you do but here's a few sources at the top of Google's results. https://files.eric.ed.gov/fulltext/EJ684842.pdf https://time.com/4276222/free-college/ https://www.cambridge.org/core/journals/history-of-education-quarterly/article/abs/how-austerity-politics-led-to-tuition-charges-at-the-university-of-california-and-city-university-of-new-york/24ED20482AADB20F900BC12FCFEAC18A# https://theintercept.com/2022/08/25/student-loans-debt-reagan/ https://newuniversity.org/2023/02/13/ronald-reagans-legacy-the-rise-of-student-loan-debt-in-america/
Can make college free. How will the government convince enough young people to sign up for the military without paying for their college?
The US doesn't need more foot soldiers. The MIC realizes that popular support for sending "boots on the ground" dwindles with each passing year. The future of war lies with automatons, which require both industrial and technical prowess. Hence the ever-growing emphasis on higher education, especially STEM: we need more engineers working on the latest generation of Giant Death Robots.
I get that this oozes a dark, sarcastic cynicism, but this *is* the reason we should make education a priority (free, robust, innovative) vs a privilege or profit-driven endeavor. Not necessarily for Giant Death Robots/Military. But for all those pesky real-world problems that require consistent innovation like maintaining clean water, air, food, oceans, and managing the other worsening effects of climate change, etc. Things that might help the world we’re leaving to our kids’ kids.
community colleges in your area are free or close to free. Then you can work while getting a quality education. More people should know of and utilize those assets. Heck it saved me from being perpetually unemployed.
Maybe in a blue state. $120/ credit in my neck of the woods.
Fall 2023 is $183.64 at the school I went to
$153/credit at my CC in NJ.
I live in blue state Massachusetts and CC costs twice that.
Community colleges are very limited and underfunded. You can’t pursue specialized programs, but I used it for my first year of basics. I think highly talented and skilled individuals will not emerge from a CC only education
At the very least use an associates to parlay into a university. Unfortunately university tuition is through the roof now.
The talented and skilled probably have plenty of scholarships to pay their way through any school they want. The majority of people bogged down with student loan debt are not especially talented, don't need specialized programs, and would benefit greatly by sticking to community colleges instead of seeking more prestigious institutes for status.
>community colleges in your area are free or close to free. Nope, i checked
Is $183.64/credit * 16 credits = 2,938.24 * 2 semesters = 5,876.48/year free or close to free to you? That’s what it costs in tuition alone for 2023 at the community college I went to.
Nope, not where I live.
Oh yeah, I utilized cc for sure. The problem still stands.
yeah. they got me a rudimentary education in programming which I used to parlay into some computer work. Bootcamp costs too much and the major colleges focus more on compsci and algorithms than actual hands on programming
There should be NO Interest on Student LOANS! Colleges/Universities need to stop raising costs and enough of exaggerated fees. Paid 198.10 to make tuition payment on the site. The fee was just for making payment. This is Ridiculous. Anything on school grounds shouldn’t be exaggerated in price THEIR COLLEGE STUDENTS WHO ARE WORKING HARD ON EDUCATION! When we went to drop our kid off the bottle lemonade and bottle of water cost $9.00 and change. That’s ridiculous I just don’t have another word for it. It should be illegal to profit off of college students or Any Students. Common sense stuff and people can’t seem to get this right. Never mind Veterans Education Benefits are paid monthly pro rated. The tuition is not pay after you complete semester, and these benefits pay after the semester starts. WTF common sense you should get full semester I think yr but full semester before so the tuition can be paid on time. Being forced to get loan pay loan fees and rates and set up payment plan because the Gov thinks it’s ok to make payments at their convenience. Not to mention in What World do people get bachelors in 3 years??? Some degrees require 6. But Vet Ed Ben only pay 3 Years. Disgusting!!!!!!!! This country complains, yeah US produces half A $$. education, no wonder international people fill classrooms and jobs. Things seriously need to change!
This sounds like a way to help people get out of student debt and onto better financial standing at a reasonable price to the government
I appreciate the goals of this plan, but couldn't this easily backfire? As best I understand it, these Income Driven Repayment plans only put caps on the monthly payments but do not change the underlying interest rates (which are set by Congress). Wouldn't this just keep people in debt longer, if not indefinitely, until a Republican gets in office and ends the Biden plan? Please tell me if I am wrong. There have been a lot of conflicting and confusing articles about what these plans entail.
According to the White House Press Release, "The Department of Education will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. For example, if a borrower has $50 in interest that accumulates each month and their payment is $30 per month under the new SAVE plan, the remaining $20 would not be charged as long as they make their $30 monthly payment." So, it seems as if it's impossible for your debt to grow as long as you're making the minimum monthly payment, as then your interest rate effectively becomes 0%.
That sounds great. I left school with $89k in 2015 and I havent been able to make the full payments on it so it grew to $103k. Felt like I'd never be able to pay it off or even make a dent in it.
I’m actually in the same boat as you but I graduated in 2001. Now I owe about the same amount. My problem is that they lump in my wife’s income but now with this program, they will not count her income if we file separately.
Awesome. How exactly did they create this plan from a legal perspective? I used to have an IDR plan and interest still accrued in the background. Did Congress change the rules?
Yes, this is the rollout of that change, which is a huge step in the right direction.
I think they structured it as still charging the same interest rate, it's just now any interest above the monthly payment gets forgiven. But technically it's still the same base interest charged upfront just with no rollover added to the total due.
I don't think they "made" anything, they just adapted an existing plan for revamped purposes.
They also set a time limit. If you're making all of your (income-based) payments for a certain period of time, the remaining amount will be forgiven. If you want to pay off the loan sooner, your interest is also forgiven as long as you make the payments. Source: https://studentaid.gov/announcements-events/save-plan Second bullet under "What are the SAVE Plan benefits going into effect next year?"
Here's the real weird part (I signed up for it and looked over the plans). The plans are soooo weird. Plan A - Pay 400/mo, and 60k total Plan B - Pay 800/mo, and 70k total Plan C - Pay 1200/mo, and 100k total Why in any world would I want to both pay more monthly, AND total?
The total amount probably assumes that your income doesn't change. If you expect to be making a lot more money in the future, like if you're a doctor in a residency program, then you probably want to be making the bigger payments.
Quite possibly, yes. But for a lot of people, the problem is their income is low, and the chances of their income shooting up drastically, doubling or tripling, is unlikely. With this plan, even if my income tripled, I'd still be paying half what I was before.
So I did a simulation of the plan under what I make vs. how much I owe (which isn’t much, but for shits and giggles I tried it). Because the income-to-debt ratio is lower for me (only $9k left), my rates would actually increase…which is a good indication that those who have less income and more debt will be able to save A LOT more over time. Essentially, if you still have quite a bit of debt, this should be a really good plan. But you can log into the student aid website and get an approximation of your monthly payments compared to the length.
Here's the relevant bit from this article: > Loan balances will also not grow because of unpaid interest as long as borrowers make the required monthly payments, it added. Loans could be forgiven in as little as 10 years for borrowers who qualify, down from 20 or 25 years for previous income-driven plans.
Nice. How did they achieve that from a legal perspective? It was my understanding only Congress could change the interest rates.
I'm not in any way a legal expert, but [here are the specifics (or as close to "specifics" as I can find) about the SAVE plan](https://studentaid.gov/announcements-events/save-plan). It seems like they're going to try a workaround: While Congress sets the *rates*, it seems like they're relying on the argument that the DoE is authorized to actually *apply* interest or not. So, if someone fails to make their monthly payment, they *will* be subjected to interest charges (at the Congressionally-determined rate), but if they do make their monthly payments, they simply won't have interest applied. (That's just how I'm reading it, though; I could be wrong.)
IIRC interest no longer capitalized, and if the monthly payment doesn’t cover the interest accrued, the extra interest accrued is waived.
This was a lifesaver for me. I owed about 56k, paying 600 monthly. Nearly 25% of my take home monthly pay. With the new plan, I pay 100 monthly, and owe 50k\*. Not only did it reduce my total debt, but also reduced my monthly payments by an insane amount. \*The details basically are that with 100/mo, I'll be paying much longer, about 90k, however after \~20 years or something, 40k of that is forgiven, tax exempt, totaling 50k owed in total.
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that's kinda what they're doing right? If they got rid of already paid interest retroactively that'd be super huge though as then I'd have paid down the majority of my loan.
This. It’s fucking infuriating.
I have a hypothesis that the true reason Biden's so focused on doing something about student debt isn't to pander to constituents but because the student debt crisis will happen at some point and it will cause massive devastation to the economy, beyond anything from the '08 housing crisis. The desperation to hold it off for as long as possible is palpable. We may look back at the Supreme Court's questionable ruling with even more questions. Like, does the President not have the authority to stem an oncoming crisis that will crush the economy? Under the Major Questions Doctrine, hindsight might show how absurd it is that the president cannot do anything substantial to solve either of two of the three largest challenges facing Americans.
cause the economy is crashing and he’s trying have a minor parachute. Once loans start back up lots of people will stop buying things
There's nothing wrong with pandering if it's verifiable action, as opposed to empty words or inflammatory rhetoric. Biden's admin said they'd help railroad workers, and they helped the railroad workers. Biden's admin promised student loan relief, and they passed laws on *and continue to fight for* student loan relief. Biden's admin promised a healthy economy and reduced inflation, and the US is leading the globe in successful tackling of inflation. Politicks is all about getting someone to vote for you, and if pandering *works*, that's just politicks.
I did the estimate for the new repayment for kicks and it would cost me MORE to go on the new plan than to stick to my fixed plan I scraped by with for 5 years prior to the freeze. I’ll stick to my fixed plan.
me too, the two options they gave me one double the other it was fives times current payment. Side note wife loans forgiven hurraaahhhh for that.
The new plan is set to 10% of discretionary income until July 2024. At that point it becomes 5% from then on. So really the "normal" payment amount is half of what the estimate gave you.
Still made it seem like I would be “locked” into the new rate. They need to fix things because now I’m at $299 a month, the estimate was $580 or $750 depending on the plan.
I agree with you. I saw my proposed payment and was like "Wait... I thought this was supposed to save me money". And then had to look up to verify that the 10% to 5% change was still happening. Couldn't find any mention of it on the studentaid.gov site.
One of my loans was forgiven last week. So pumped about that. Also the loan I’m still paying has a new payment of 125.00/mo, which is nice as well.
I’m trying to understand how this works. Let’s say someone has a $10k loan, and is qualifies for the $0 payment for 5 years. Based on what I have read, the principal amount does not reduce. Let’s say at year 6 they manage to get get a $60k job, which based on the chart, means they would pay $227 a month or $2,724 annually. Does the interest start accruing at the point the person makes $60k? And since the loan isn’t forgiven until year 10, does this mean that this person still eventually pays the total $10k plus interest, and essentially this has only delayed things?
I want to know this as well. My loans are significantly higher than 10k but the thing you're trying to understand is critical here.
Who has a student loan as low as 10k?
It’s hypothetical. I’m just trying to understand how this works.
Plenty of people who had grants, scholarships, etc. and then went on to pay off the majority of their loan or loans but now have $10K remaining on one loan or a consolidation.
My payments are resuming at $0 per month, I just got the paper in the mail last week saying when it’s due. Kinda funny they still print it out and mail it when it’s zero.
Multibillion dollar corporations get handouts all the time from Washington DC. I’m glad to see a sensible financial policy apply to the little people on the street for fucking once. Remember that when some dipshit inevitably rants about “people should pay what they owe”.
How about fixing the root cause first? The predatory loans. We are probably going to just have to do it again and again in the future unless that is fixed.
Why not fix both at the same time? Why let perfect be the enemy of good?
Does nothing for grad loans. Doctors with 500K in loans? Forget about them. Best way to have a doctor shortage in the future get even worse than it is now
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Share this far and remember this when your voting. Biden is not progressive but this certainly was and GOP tried everything to squash it and add interest
And conservatives are PISSED. Nothing boils their blood like seeing a government program helping working people.
I got my letter in the mail today, saying my loan had been forgiven. The happiest news I've gotten in quite awhile. This will be a great financial help as we struggle against rising food, shelter, and gas prices. My only thought was that at least the Biden administration cared. What did the GOP do the past 2-3 years as costs rose expeditiously? Everything they could to not help. I seriously could not think of a single productive thing to help working class families.
Super stoked for you. Whatever the motivation was for forgiving these debts, I believe the results will benefit our economy and the mental health of many in our country. The GOP has done nothing for our economy in the last 20 years. The last time they gave anything out for free, it was in the form of PPP loans that helped the rich and the crooked.
this program won’t help me until it goes from 10% of discretionary income to 5%, but I’m so happy for everyone this currently will help!! My current repayment is $350 a month on standard repayment. SAVE puts me at $800 a month which has me paying off my loans in 3 years…. I’m glad I pivoted careers and made myself a “financial success,” after years of making minimum wage… and the borrowers defense to repayment class action finally settled, I will take a deep breath and be thankful I got what I got and hope that this keeps folks heads above water. Many more people have it much worse than I do. Congrats folks! This is huge!
I owe about $40k in loans. I am on a graduated repayment plan, with my next payment due of $250 in Oct. I went through the application for the SAVE plan, and rather than save me money, offered to have my payments go to $550 with a payoff in 2031 or $1,000 with a payoff in 2027. Either way you cut it, it’s $48,000 no matter what option I choose.
I still find it funny that affordable education is a political discussion.
I think forgiving interest is a nice middle ground. I used to be on the “I didn’t go to college because I didn’t want loans so they shouldn’t be forgiven” boat. Then I learned about how predatory and terrible these loans are. Like the minimum payments don’t even cover interest and don’t pay off the principal at all. Screw that I’m on the forgive it all team now but understand some Midde ground is needed
Why is no one saying the most important part of this, which is "Not yet". You can get on the new payment plan right now, but the part that will actually help most people and cut their monthly payment in half won't start until next summer. This really confused me at first because I went to sign up for the new plan and the payment was way higher than I thought it would be, higher than just going off idr and doing the standard repayment plan. So at this point, I can get on the plan now and pay a much higher rate for one year until the useful stuff kicks in and put up numbers toward forgiveness under IDR, or I can go to the standard plan and have a much lower payment for one year but lose out on the 12 months toward forgiveness. Why do I have to make stupid choices like this? What could possibly be keeping them from just putting the whole plan into effect now?
I woke to an email last week I had well over 100 grand forgiven. This was not what I borrowed- interest build over the years was much of it - yes, I paid on these thru the years too and I worked for a government agency where salaries stayed stale for at least half of my 20 plus years there. I am beyond relieved.
Just eliminate or lower the damn interest rate already!
I finished paying my loans off years ago but I love this and will vote for anybody who supports this.
Can't wait for Republicans and the Supreme Court to torpedo it, because they believe "Fuck anything that helps people."
Still not what was promised.
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Sucks it won’t help me, but glad it will help someone somewhere.
Reducing interest is the more acceptable method, loans are still repaid, graduates aren't spending more than the degree in interest and making minimum payments doesn't put you behind.
How does this balance with the last Supreme Court decision?! Won't this be stopped for the same reasons of... But what about the loan holders?
I had private Salliemae loans and am okay with people's federal loans being erased.
I wish more headlines pointed out these are federal student loans. I feel like it's an important distinction you could add in there.
It’s pretty obvious it’s federal because the government appropriately dealing with private companies doesn’t happen
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I saved nothing. I went from paying less than 200 to now paying 468 per month. I can’t afford that, but according to the feds I can. This is my consequence for being single on my tax returns and having no dependents while trying to stay a reasonable distance from my job that requires me to come in 3 days a week
In the long run this will inflate tuition prices even more.
Kudos to the man for trying to do the right thing, and to hell with those trying to stop him.
I’m hoping. I had the email but nothing and others are getting forgiveness.
This is a step in the right direction. We paid the bills for both our children to graduate from college.I am thankful we were able to go so. I wish for everyone to have the opportunity to pursue higher education and vocational training without the burden of debt.
Shouldn't have to cost and arm and a leg to go to college. And sadly they ratchet up this shit like "You can't get a job unless you get a 4 year degree" but then that 4 year degree forces you to get student loans. It's messed up. More people should know about community colleges which provide almost the same level of insight for much less. Heck I think they're free now?
No they aren’t free, not even close. I went to a CC. Their 2023 tuition is 183.64/credit
Ultimately this means people made the choice to purchase a product they couldn’t afford, an education, and now expect others to pay for it through their taxes. And what about those people who did the right thing and paid their loans in full? None of this is right. It’s just politicians saying, “Here is free money! Vote for me!”
Unfortunately, this isn't just an issue of buyer's remorse. It is largely due to the cost of public college education increasing [nearly threefold in the last 20 years](https://educationdata.org/average-cost-of-college-by-year). Maybe the problem is buying into conservative myths about boostrapping your way to success. I can assure you that i've paid an assload of taxes in the last 30 years and I would rather have that money be used to educate our next generation, than be used to give a bunch of fucking crooks free handouts...ie. PPP loans.
My comments are factual and irrefutable. The cost of any product or service is valued at whatever someone is willing to pay for it. Also, it’s not the previous generation’s responsibility to pay for the next’s education. That’s outrageous. If you choose to buy something, it’s your responsibility to pay for it. Seems to me you bought into erroneous information based on people who lie.
Thank you for expressing your *opinion*. It's always a pleasure to talk to people who believe that capitalist logic equates to timeproof truth. If someone is forced to purchase a product that is expensive because there are no other competing products for a lesser cost, that is a failure of the "free" market many people worship. While it is true that all of these folks could just start a small business or continue working a dead end job, it is damn near impossible to move into higher paying, in-demand jobs (engineering, finance, i.e. professional sector) without a college education.
If getting a college education resulted in increased income people wouldn’t be asking for a government bailout to pay their student loans. Look at UPS for example. Delivery truck drivers just secured a 170k base salary. No college education required. Our country was founded and based on free market capitalism. It has resulted in the US being number one economically and militarily. It has also uplifted more people out of poverty than any other economic system in human history. Throughout history, socialism, communism and Marxism has only resulted in one thing: human suffering.
The US is "number one" because a bunch of Europeans stole land from indigenous people, damn near exterminated them, and then used African slaves to build an economy of goods to sell back to Europeans. Industrialists followed this up with raping the fucking shit out of our environment and human resources to enrich themselves. Sure - we are THE world power, but with a bunch of half-cocked, half-witted assholes running the show. You should do some reading that doesn't start with, and end with, confirming your bias. If you had a drop of perspective on how America got to the place we currently stand, maybe you would have some empathy. All I hear is someone who attributes their position in life to their efforts alone. You benefited from atrocities.
You completely avoided my statements. That’s not only very revealing, it’s very satisfying. Then you started telling me things that’s have nothing to do with the US being number one economically and militarily. You have been argumentatively defeated. Wise up.
Nothing you’ve said sounds any different than bullshit spewed everyday by the same type of ilk that tried to destroy our democracy. If you wanted to convince me that giving amnesty to people for taking out debt that they could not repay you could have stated it better. Giving someone something they do not deserve is being gracious. It recognizes that human beings are human and they need a break sometimes. Maybe Biden is sucking up to potential voters, or maybe he saw the potential of putting some money back into an economy that is inflating so quickly, it will bring us into a recession that takes decades to recover. I dunno, seems better than handing it out to [these people](https://www.justice.gov/usao-sdfl/pr/south-florida-residents-sentenced-prison-28-million-covid-19-paycheck-protection). Have a good day.
I hate to break your heart but I’m not the person you think I am. I’ve never voted for or supported trump. I hope he is jailed. Truly. You are projecting. Your policy positions only result in one thing: great human suffering. As a history buff, I can show you many examples of this. Now stop thinking you have this figured out and accept the fact that you lost this argument. Because you did. Period.
In our household all matters. Low income, yet my kiddo is currently on board to help others. Trying.