TAMPA, Fla. — Many Americans owe tens of thousands of dollars from student loans, but the Biden administration said they are looking at changes that will help make paying those loans back affordable.
Under the proposal, those making less than $30,600 would be able to pause federally backed loan payments completely.
The figure is up for the $24,000 threshold and is based on the poverty line.
Those above the threshold will have payments cut in half, with required payments going from 10 percent of income to just 5 percent.
Jacob Channel is a student loan expert at Lending Tree and said the changes are meant to simplify the system.
“There are plenty of people that we depend on in society. Social workers, teachers, and nurses who need advanced degrees, who often don’t earn enough of an income to really keep on top of their payments. And this is what this program is supposed to help with," said Channel.
The new regulations would also stop accrued interest from adding up and building a mountain of debts some borrows are never able to get out from under.
“It’s sort of a perfect storm right now of people still sort of recovering from the pandemic, having to deal with high inflation, and then having to deal with their student loan payments restarting that they are not prepared for," said Channel.
It’s still unclear when these new proposals for loan repayment might take effect.
We also don’t know if the Biden administration’s student loan forgiveness program will happen. That issue is headed to the Supreme Court.
