The latest student loan updates
August 29, 2024 – 4 mins
Student loans at the federal level
Heads up—there are new laws in the works that could impact your federal student loans. Staying informed is key, so don’t forget to touch base with your loan servicer regularly. That way, you’ll be in the know about any updates or changes. For more details, check out the latest updates on NASFAA's Legislative Tracker.
The latest updates on federal student loan forgiveness
The Biden-Harris administration has approved $7.7 billion in federal student debt relief for 160,000 borrowers. This aid is for three categories: those getting Public Service Loan Forgiveness (PSLF), those who signed up for President Biden’s Saving on a Valuable Education (SAVE) Plan and are eligible for its shortened time-to-forgiveness benefit, and those receiving forgiveness on income-driven repayment (IDR) plans.
And that's not all. An additional $1.2 billion has been approved to help 35,000 public service workers.
This announcement brings the total loan forgiveness to $168.5 billion for 4.76 million Americans.
So what does this mean for you? If you qualify, you could see a significant reduction in your federal student loan debt. Make sure to reach out to your loan servicer to discuss your options and to stay up to date on your account.
Student loan relief
Even if your federal student loans aren't forgiven, there are other options to lower your monthly payments through income-driven repayment (IDR) plans. These plans adjust your payments based on your income and family size, making it easier to manage your debt. To find out which plan is best for you, contact your loan servicer and discuss options. Lowering your payments is possible, so take advantage where you can.
PAYE Plan
The Pay As You Earn (PAYE) Plan is designed to help borrowers manage their student loan debt by capping monthly payments at 10% of their income. This means your payments will adjust based on what you can reasonably afford, making it easier to stay on top of your debt.
After 20 years of qualifying payments, any remaining loan balance is forgiven.
IBR Plan
The Income-Based Repayment (IBR) Plan helps manage student loan payments by limiting them to 10-15% of your income, depending on when you first borrowed. Your payments are adjusted according to what you can afford, which helps if your income fluctuates.
After making payments for 20-25 years, depending on when you entered the plan, any remaining balance may be forgiven.
ICR Plan
The Income-Contingent Repayment (ICR) Plan calculates your monthly payment based on whichever is lower: 20% of your discretionary income or the amount you’d pay on a fixed 12-year plan. This plan offers flexibility, especially if your income varies or you've got other financial commitments. It’s also an option for both Direct Loan and Parent PLUS Loan borrowers. After 25 years of payments, any remaining balance can be forgiven.
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Student loan servicing updates
The Biden-Harris administration is also rolling out updates to improve the overall loan experience. New federal student loan servicers are emerging, and some borrowers will see their loans transferred to these new servicers. If your loans are transferred to a new servicer, don’t worry. You’ll receive clear instructions on what to do next.
Some servicers are rebranding, like FedLoan Servicing, now known as Aidvantage, so keep an eye out for these changes.
The U.S. Department of Education is also enhancing the studentaid.gov website to make managing your loans and grants easier with a more intuitive and user-friendly website.
All of this is to make your federal student loan experience smoother and more efficient. Make sure to keep looking out for improvements, and always check your email for important updates from your loan servicer.
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