Biden to cut student loan payments for millions of borrowers next month
Next month, President Joe Biden is set to lower student loan payments for millions of student loan borrowers, with some experiencing a 50% reduction in monthly payments.
The effort is part of the final stage of implementing the Saving on a Valuable Education Plan, a new income-driven repayment program introduced by the administration last year. More than 8 million borrowers have enrolled in the program.
Currently, the program required borrowers to pay 10% of their discretionary income, but the formula will soon change.
Next month, borrowers who have only undergraduate student loans will have the formula reduced to just 5% of discretionary income, and borrowers who have only graduate school loans will remain at 10% of discretionary income. Those who have a mix of graduate and undergraduate student loans will have a uniquely-tailored formula of between 5% and 10% of discretionary income depending on the weighted average of their undergraduate and graduate school debt based on the loans' original principal balances.
Read more: Forbes
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