Proposed Overhaul of Federal Student Loan Program by Congressional Republicans

SOURCE www.npr.org
Congressional Republicans are proposing a major overhaul to the federal student loan program. The plan includes simplifying repayment options for future borrowers, with fixed monthly payments or income-based payments. The overhaul aims to ensure that borrowers see their loan balances decrease each month, with forgiveness after 30 years of qualifying payments. This plan would impact millions of borrowers and exclude current borrowers from the new options.

Key Points

  • New plan includes fixed monthly payments or income-based payments
  • Forgiveness after 30 years with qualifying payments
  • Borrowers see loan balances decrease monthly

Pros

  • Simplifies repayment options for future borrowers
  • Ensures borrowers see their loan balances decrease each month
  • Offers forgiveness after 30 years of qualifying payments

Cons

  • May push lower-income borrowers into default with required minimum payments
  • Eliminates President Biden's legally frozen SAVE Plan
  • Limits plan change flexibility for borrowers