IDR Reform.pdf

President Biden's proposed regulations would amend the Revised Pay As You Earn (REPAYE) plan to make student loan repayment more manageable for low- and middle-income borrowers. The changes would reduce monthly debt burdens and lifetime payments, with future borrowers seeing lifetime payments per dollar borrowed fall by 40% on average. Specifically, the proposal would increase the amount of income protected from repayment to 225% of the Federal poverty guidelines, and borrowers with undergraduate loans would only pay 5% of their discretionary income. Examples of savings include a typical graduate of a four-year public university saving nearly $2,000 a year, and a teacher saving over $17,000 in total payments over 10 years. The Department of Education estimates that 85% of community college borrowers would be debt-free within 10 years of entering repayment.