Student Loan overhauls coming this week (listen live now)

[Johnny2X2X]

They've overhauled the public service forgiveness provisions, and more changes are coming.

https://www.forbes.com/sites/adamminsky/2021/10/04/overhaul-of-student-loan-forgiveness-and-relief-programs-begins-today-with-public-hearings/?sh=6eca3cf81c0f

A lot of people affected by public service and disability, but the biggest thing to watch for is in regards to this, "And the committee may create a new income-driven repayment plan that could be more affordable than current income-based options."

Biden is pushing for the PAYE option to undergo radical changes. PAYE (Pay As You Earn) currently is set to 10% of your "discretionary" income per year. Discretionary income is currently defined as gross minus 1.5 times the poverty rate income. They are wanting to reduce this to 5%, and potentially increase that 1.5 times poverty deduction to 2 ore more times.

This is a massive deal, they're talking about halving the payments for most borrowers. This would be life changing and IMO basically end the student loan crisis in America.

There are 3 open sessions for these negotiations, now and the first weeks of November and December. These rule changes are not the subject of Congressional oversight, they can change repayment options on their own as they are expected to do.

[Johnny2X2X]

1. You can help!

You can register to comment on these hearings here:

https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/index.html?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

Comment that you expect that the committee fulfil Joe Biden's campaign promise on PAYE to reduce it from 10% to 5%.

[Johnny2X2X]

2. Listening live now

This is great, these are all people fighting for students. They're undoing the damage Trump's people did to our education system and student loan system.

[Johnny2X2X]

3. Income based repayment up right now!

https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/index.html?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

This is for all the marbles, reducing from 10% to 5% of discretionary income is a game changer.

[Johnny2X2X]

4. This is good stuff here

This is your government working for you. All people making the rules who are earnestly working for student loan borrowers.

Here's what I think happens from here, they're going to adopt the 5% Income based repayment plan. That will halve the payments for people on this plan. They might however put an income cap on that 5%, so higher wage earners might have to stick with the 10% or there could be a 7.5% option. They'll increase the income deduction to 2 times the poverty rate income from the current 1.5 times.

I am a higher wage earner who owes a lot in student loans. That that cutoff is for the 5% to be available is important to me, hopefully it's well into 6 figures.

The forgiveness at the end of 20 years for undergrad and 25 years for grad loans is going to be huge. This will make headlines. It's going to forgive hundreds of billions in loan balances.

I think this actually solves the student loan crisis in this country. Get it done!