What is the latest with student loan repayment?

January 13, 2023

There have been a couple of updates, and here is the latest:

$10,000 loan forgiveness ($20,000 for Pell grant recipients) has been suspended due to two lawsuits challenging the forgiveness.  The Supreme Court has scheduled hearings to begin February 23, so we won’t know anything until they decide whether or not to allow it.

In the meantime, the Department of Education is finalizing changes to the Income Driven Repayment programs:

There are currently five different options.  They are looking at repealing all four of the older ones and putting everyone in Revised Pay as You Earn (REPAYE).

They are making changes to their calculations of “discretionary income”, which is the income above federal poverty guidelines.  These changes will result in less discretionary income for most borrowers.

Currently, they calculate your payment as 10% of your discretionary income.  That will be reduced to 5% on undergraduate loans.

They will not be adding unpaid interest to the loan amount, so your balances won’t go up over time.

At the end of 20 years of payments, the rest of the balance will be forgiven.

They are currently allowing 30 days for public input, so we don’t know what exactly these changes will entail.

Watch this space…