Student loans to see substantial changes
Several new regulations pertaining to student loans are set to be finalized.
In early November, the U.S. Department of Education’s rulemaking committee decided on student loan repayment and forgiveness provisions in the One Big, Beautiful Bill Act, according to a news article from Forbes. The changes will be implemented beginning in 2026.
The reform process will see the termination of the Income-Contingent Repayment, Pay As You Earn and Saving on a Valuable Education plans by July 1, 2028. Although student loan borrowers will still be able to enroll in the Income-Based Repayment plan until July 1, 2026, the Repayment Assistance Plan will take its place. The new income-driven repayment plan will extend the student debt forgiveness eligibility from 20 or 25 years to 30 years and increase the monthly repayment requirements.
The other changes to repayments include the exclusion of a marriage penalty for those on the Repayment Assistance Plan, the decision not to penalize borrowers for making extra payments toward the principal balance and the creation of a tiered Standard plan with a minimum monthly repayment requirement of $50. Regarding student loan forgiveness, the U.S. Department of Education determined that economic hardship will not count toward Public Service Loan Forgiveness, repayments will be considered on time if they were made prior to or on the due date and advance payments can contribute to debt relief credit.
To establish the new rules, the U.S. Department of Education will publish the updates in the Federal Register.
Read more: Forbes
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