by - The public comment period for Biden’s proposals to overhaul income-based reimbursement plans has just ended.
- Representative Bobby Scott, the top Democrat on the House education committee, suggested that the relief be expanded to graduate students.
- He proposed making the loan forgiveness period the same for university students: 20 years.
Public comment on President Joe Biden’s proposals to reform student loan payments is now closed — and a top Democratic lawmaker has ensured his opinion is heard.
On Friday, Representative Bobby Scott, a member of the House education committee, provided a comment to the Department of Education on its latest proposal to reform income-based repayment (IDR) plans, which offer borrowers affordable monthly payments. based on their incomes with the promise of loan forgiveness after at least 20 years.
Given the difficulty borrowers have had actually getting forgiveness through these plans, Biden announced a series of proposed reforms in January, including amending the Revised Pay As You Earn (REPAYE) plan, created in 2016 to calculate borrowers’ monthly payments. based on your discretionary income rather than creating an entirely new plan. It would also halve undergraduate student loan payments and shorten the timeline for them to receive relief.
But Scott said in his commentary that “one final rule would go further to ensure that borrowers most in need can easily access the benefits of these changes” — especially when it comes to borrowers with postgraduate loans.
“I propose lowering the repayment time for graduate loans under REPAYE from 25 years to 20 years in the final rule,” wrote Scott. “Parity between undergraduate and graduate loan repayment schedules would encourage borrowers to enroll in the more generous REPAYE plan and reduce confusion when deciding on repayment plans in general.”
He also noted that his suggestion “would help address the unfortunate inequalities in graduate lending, such as the fact that black borrowers owe almost twice as much as white borrowers on graduate loans, and Latino borrowers experienced a 60% average increase in student debt between 2004 and 2016.”
Borrowers with graduate loans often have difficulty paying off their debts if they take out grad PLUS loans, which are a type of federal loan with the highest interest rate. Interest can accumulate on the borrower’s principal balance, making it difficult to touch the original borrowed amount.
Biden’s proposals would also address this accrual of interest, known as compounding, by limiting it in every possible instance. Still, while Biden’s new IDR reforms are significant if implemented properly, Insider has previously reported that it risks creating yet another plan that doesn’t work as intended.
Along with those reforms, which the department plans to implement this summer, Biden will also be tasked with resuming payments to millions of federal borrowers after what will be more than a three-year pandemic pay break, and if the Supreme Court upholds the plan Biden to write off up to $20,000 in student debt for federal borrowers, which will add another administrative burden to the administration.
It’s unclear whether Biden will make any changes to his proposals after the public comment period, but many borrowers continue to hope that it will be an improvement over what they’ve experienced in recent decades.
“I don’t live an extravagant life, but just the bare necessities of life, so I did the income repayment plan for a while,” one borrower told Insider. “But it’s been really confusing and they don’t make it easy.”
