TAX SOFTWARE DEALS OF THE WEEK
How will the new repayment plan benefit student loan borrowers?
How will the new student loan repayment plan work?
Second, discretionary income will be calculated differently.
Most current repayment plans definite discretionary income as household income minus 150% of the federal poverty level.
The new plan will define discretionary income as household income minus 225% of the poverty level.
Their standard monthly payment now would be 10%, or $487 per month.
That’s an actual savings of 68% per month under the new proposed plan.
Finally, the new IDR plan proposed by Biden would cover any borrower’s unpaid monthly interest.
How do income-driven repayment (IDR) plans for student loans work now?
Income-driven repayment planshelp borrowers whose incomes are low when compared to their high levels of student loan debt.
These plans allow borrowers to make monthly loan payments that are more affordable than theirstandard repaymentwould be.
IBR is the only repayment plan that includes loans in the Federal Family Education Loan Program (FFELP).
A newREPAYEprogram from 2015 expands eligibility for a pay-as-you-earn key in plan.
It also extends the payment period to 25 years for borrowers with graduate school loans.
