Biden doesn't want to fight for 50,000 student loan relief. It's too hard
- Thread starter 850credit
- Start date
It will be interesting how he uses the Higher Education Act to potentially get rid of debt.
This is going to be interesting
Presidents Remarks
I'm going to start this post based on the information released today, June 30th via the President's remarks and what is published by the ED.
Be aware that until we get the federal register with the actual final regulations, which we know won't be today, there will likely be a lot we can't answer yet. I will put everything we DO know in this post
The next possible federal register is July 3rd. I usually get a pre-copy the day before and so far i haven't seen the one we are waiting for. So i don't expect we will have details until after the 4th.
Here's what we know:
Edit: press release is out. https://www.ed.gov/news/press-relea...nistrations-one-time-student-debt-relief-plan
The new plan will base payments on 5% of discretionary income. Based on his remarks I do think that only applies to undergraduate loans. That doesn't mean there won't be something for graduate loans - remember - we are waiting for the details
I have a feeling his comments about trying again via the HEA has to do with the one time IDR adjustment. If you don't know what that is see here and https://studentaid.gov/announcements-events/idr-account-adjustment
Or it could be the new repayment plan. Or maybe he will try again - but i really think he meant the adjustment.
I do think we will see something published by the ED sometime today with a few more details - but not all.
PS: I have to admit I loved Biden's comments about the PPP loan hypocrisy. You'd almost think he'd been reading this sub and folks reaction to the SCOTUS denial.
This is going to be interesting
Presidents Remarks
I'm going to start this post based on the information released today, June 30th via the President's remarks and what is published by the ED.
Be aware that until we get the federal register with the actual final regulations, which we know won't be today, there will likely be a lot we can't answer yet. I will put everything we DO know in this post
The next possible federal register is July 3rd. I usually get a pre-copy the day before and so far i haven't seen the one we are waiting for. So i don't expect we will have details until after the 4th.
Here's what we know:
Edit: press release is out. https://www.ed.gov/news/press-relea...nistrations-one-time-student-debt-relief-plan
The new plan will base payments on 5% of discretionary income. Based on his remarks I do think that only applies to undergraduate loans. That doesn't mean there won't be something for graduate loans - remember - we are waiting for the details
I have a feeling his comments about trying again via the HEA has to do with the one time IDR adjustment. If you don't know what that is see here and https://studentaid.gov/announcements-events/idr-account-adjustment
Or it could be the new repayment plan. Or maybe he will try again - but i really think he meant the adjustment.
I do think we will see something published by the ED sometime today with a few more details - but not all.
PS: I have to admit I loved Biden's comments about the PPP loan hypocrisy. You'd almost think he'd been reading this sub and folks reaction to the SCOTUS denial.
So the new repayment program (SAVE) is completely diff from any submissions we've made in the past, right?
You think they'll be able to get the new plan details set and have everyone's accounts updated by Sept.?
We will get more details next week, but it looks like a totally new program. It could be the same and just a revamp with the name change, but no one knows...
I find it interesting and what Ive been reading online that this High Education Act is something he could potentially use to eliminate debt or even inact some more changes....
That's what's up. Thanks again for the updates
Edit: it looks like they actually are going to try again..this time through negotiated rulemaking. Which means it will take at least a year to get rules.That's what's up. Thanks again for the updates
I do think we will see something published by the ED sometime today with a few more details - but not all.
"Kagan called the decision to even hear the case “overreach,” writing “Under Article III of the Constitution, a plaintiff must have standing to challenge a government action. And that requires a personal stake—an injury in fact. We do not allow plaintiffs to bring suit just because they oppose a policy.”
If it takes a year its risky.
If it doesn't work then Biden is faced with a huge loss months out from the 2024 election.
Crazy
...so the 6 that voted to shoot it down spent all this time thinking of how to make their shitty decision smell like roses and said fuck procedure or the rules, huh?
Fools on here defending Cube supporting Trumpkkk cause he can rap. Not realizing he's selfishly on TrumpKKK''s nuts due to the tax breaks for the wealthy. As if Cube gives damn about average Blacks
The Court is definitely on their bullshit. In this case the plantiffs weren't affected by Biden's student loan relief and in that case with the web designer they ruled in the web designer's favor based on a hypothetical event because no LGBTQ people have asked that web designer to do any work for them yet the court ruled that the designer doesn't have to provide said work that they've never been asked to do.
Not sure how accurate this is, but I would recommend you guys to look at this video...This would be very interesting if true....
@Madrox
If this is true and I can see this happening man this would be a fucking game changer.
Change the income limit to where people making less than 80,000 would pay zero dollars......
@Madrox
If this is true and I can see this happening man this would be a fucking game changer.
Change the income limit to where people making less than 80,000 would pay zero dollars......
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The Negotiated Rulemaking Process for Title IV Regulations - Frequently Asked Questions
What is negotiated rulemaking?
Typically, the Department of Education (the Department) develops its proposed regulations without public input and then publishes them in the Federal Register for comment by the public. The published document is known as a Notice of Proposed Rulemaking, or NPRM. Under negotiated rulemaking, the Department works to develop an NPRM in collaboration with representatives of the parties who will be affected significantly by the regulations. This is done through a series of meetings during which these representatives, referred to as negotiators, work with the Department to come to consensus on the Department’s proposed regulations. These meetings are facilitated by a neutral third-party.
The Department is specifically required by law to use negotiated rulemaking to develop NPRMs for programs authorized under Title IV of the Higher Education Act of 1965, as amended (Title IV programs) unless the Secretary determines that doing so is impracticable, unnecessary, or contrary to the public interest. The Department generally follows these same procedures when it uses negotiated rulemaking to develop NPRMs for programs other than the Title IV programs.
How are the issues to be negotiated determined?
The issues to be negotiated come from three sources: newly enacted laws, the Department, and the public. Because negotiated rulemaking is required for development of NPRMs for the Title IV programs, newly enacted statutory provisions for which Title IV regulations are needed are automatically included on an agenda for negotiated rulemaking (unless the Secretary determines that negotiated rulemaking is impracticable, unnecessary, or contrary to the public interest; see Q1&A1). Other issues for negotiated rulemaking are identified by the Department when it makes a determination that existing regulations need to be amended.
Once the Department determines that rulemaking is necessary, it publishes a Notice in the Federal Register announcing its intent to conduct negotiated rulemaking and identifying the areas in which it intends to develop or amend regulations. This Notice announces a public meeting (or meetings) to obtain advice and recommendations on the issues to be negotiated from the public. The Department may also solicit written submissions of advice and recommendations.
After consideration of this public input, the Department develops a list of the issues that a negotiating committee (or committees) is likely to address, and publishes the list in another Notice in the Federal Register. When the negotiating committee first meets, members may suggest additional issues that may be added to the agenda, subject to the full committee’s approval.
How are negotiators selected?
Negotiators are nominated by the public, and selected by the Department. In the same Federal Register Notice that announces the Department’s intent to conduct negotiated rulemaking or a subsequent Notice, the Department solicits nominations for negotiators to represent the constituencies who will be significantly affected by the regulations. The Department identifies in the Notice the constituencies it believes will be significantly affected. This may include, but is not limited to, students, legal assistance organizations that represent students, institutions of higher education, state student grant agencies, guaranty agencies, lenders, secondary markets, loan servicers, guaranty agency servicers, collection agencies, state agencies, and accrediting agencies. The Department welcomes nominations for representatives of other constituencies who are thought to be significantly affected. Before nominating an individual to participate as a negotiator, the nominator should confirm that the potential nominee can and will make the necessary time commitment to the process (see Q5&A5).
The Department selects negotiators for a committee from the list of nominees with the goal of providing adequate representation for the affected parties while keeping the size of the committee manageable. By law, a federal agency must limit membership on a negotiated rulemaking committee to 25 members unless the agency head determines that a greater number of members is necessary for the functioning of the committee, or to achieve balanced membership. Typically, the Department convenes committees of 12 to 15 negotiators, as well as an alternate for each negotiator to ease attendance concerns for negotiations consisting of multiple sessions. Each committee includes at least one Department representative.
Once members of a committee have been confirmed, the Department publishes another Notice in the Federal Register announcing the committee and its membership. The committee may also add members at the committee meetings, subject to the full committee’s approval.
Individuals who are not selected as negotiators but who will be affected by the regulations may still participate in the proceedings in several ways, such as having access to the individuals representing their constituency to express their views, and participating in informal working groups on issues between meetings. For more on the public’s role in the negotiated rulemaking process, see Q4&A4. Of course, individuals who are not selected as negotiators--like any other member of the public--can always submit comments in response to the published NPRM.
Is negotiated rulemaking open to the public?
Members of the public may observe meetings of the negotiating committee, but cannot speak unless recognized by the committee. Typically, at the end of each day’s meeting, the committee provides an opportunity for the public to comment. Caucuses (i.e., meetings of smaller groups of negotiators) are open to the public at the discretion of the negotiating committee.
Printed materials used by the negotiators are available to the public on the Department’s negotiated rulemaking Web site. The address for this Web site is announced in the Federal Register Notice announcing the members of the committee.
The committee protocols usually address how the negotiators may interact with the media.
How is the negotiated rulemaking process structured and what is the time commitment for a negotiator?
A negotiating committee usually meets for three sessions at roughly monthly intervals. Each session usually lasts three days. The number of sessions, meetings in a session, length of the session meetings, and the time between sessions may vary depending on the issues being negotiated.
The first order of business for a negotiating committee is to finalize the agenda and protocols, which are agreed upon by consensus of the committee. Once the agenda and protocols are finalized and agreed upon, the committee begins its negotiations of the issues on the agenda.
During the time between sessions, the Department drafts and amends the proposed regulatory language based on committee discussions and on any tentative agreements reached on the issues. The Department provides this draft regulatory language to the negotiators prior to the subsequent session. Subcommittees formed by the negotiators may meet during this time to work on specific issues. The subcommittees bring the results of their discussions to the full committee when it reconvenes. Again, a nominator should confirm that a potential nominee can and will make the necessary time commitment to the process before nominating an individual to participate.
How is consensus defined for purposes of negotiated rulemaking?
Consensus means that there is no dissent by any member of the negotiating committee. Thus, no member can be outvoted. The absence or silence of a member at the time the final consensus vote is taken is equivalent to not dissenting. All agreements reached during the negotiations are assumed to be tentative agreements until members of the committee consider all of the issues included on the agenda, and vote on the entire proposed regulatory language at the end of the final session of the negotiated rulemaking. If final consensus is achieved, committee members may not withdraw their consensus and the Department will use this consensus-based regulatory language in its NPRM. Only under very limited circumstances may the Department depart from this language.
What happens after the negotiations have concluded?
If consensus is achieved, the Department uses that regulatory language in its NPRM. If consensus is not achieved, the Department determines whether to proceed with regulations. If the Department decides to proceed with regulations, it may use regulatory language developed during the negotiations as the basis for its NPRM, or develop new regulatory language for all or a portion of its NPRM.
Once the proposed regulatory language for the NPRM is finalized, the Department drafts the preamble language (the portion of the NPRM that explains the proposed regulatory text). If consensus was reached, the Department usually shares the preamble language with the negotiators who may review it for accuracy. Although the preamble language is not negotiated, the Department may agree during the negotiations to include in the preamble explanations of certain issues. If the committee did not reach consensus, the preamble language is not shared with the negotiators.
When the NPRM is published in the Federal Register, it contains a request for public comments and a deadline for submitting those comments. If consensus was reached, negotiators and those persons and entities whom they represent may not comment negatively on the consensus-based regulatory language. The Department considers the comments received by the close of the comment period in developing final regulations. The final regulations published in the Federal Register contain the regulations with which affected parties must comply and the date by which they must do so. The preamble of the final regulations includes a summary of the comments received, the Department’s response to the comments, and an explanation of any changes made to the regulations that differ from the proposed regulations.
What is negotiated rulemaking?
Typically, the Department of Education (the Department) develops its proposed regulations without public input and then publishes them in the Federal Register for comment by the public. The published document is known as a Notice of Proposed Rulemaking, or NPRM. Under negotiated rulemaking, the Department works to develop an NPRM in collaboration with representatives of the parties who will be affected significantly by the regulations. This is done through a series of meetings during which these representatives, referred to as negotiators, work with the Department to come to consensus on the Department’s proposed regulations. These meetings are facilitated by a neutral third-party.
The Department is specifically required by law to use negotiated rulemaking to develop NPRMs for programs authorized under Title IV of the Higher Education Act of 1965, as amended (Title IV programs) unless the Secretary determines that doing so is impracticable, unnecessary, or contrary to the public interest. The Department generally follows these same procedures when it uses negotiated rulemaking to develop NPRMs for programs other than the Title IV programs.
How are the issues to be negotiated determined?
The issues to be negotiated come from three sources: newly enacted laws, the Department, and the public. Because negotiated rulemaking is required for development of NPRMs for the Title IV programs, newly enacted statutory provisions for which Title IV regulations are needed are automatically included on an agenda for negotiated rulemaking (unless the Secretary determines that negotiated rulemaking is impracticable, unnecessary, or contrary to the public interest; see Q1&A1). Other issues for negotiated rulemaking are identified by the Department when it makes a determination that existing regulations need to be amended.
Once the Department determines that rulemaking is necessary, it publishes a Notice in the Federal Register announcing its intent to conduct negotiated rulemaking and identifying the areas in which it intends to develop or amend regulations. This Notice announces a public meeting (or meetings) to obtain advice and recommendations on the issues to be negotiated from the public. The Department may also solicit written submissions of advice and recommendations.
After consideration of this public input, the Department develops a list of the issues that a negotiating committee (or committees) is likely to address, and publishes the list in another Notice in the Federal Register. When the negotiating committee first meets, members may suggest additional issues that may be added to the agenda, subject to the full committee’s approval.
How are negotiators selected?
Negotiators are nominated by the public, and selected by the Department. In the same Federal Register Notice that announces the Department’s intent to conduct negotiated rulemaking or a subsequent Notice, the Department solicits nominations for negotiators to represent the constituencies who will be significantly affected by the regulations. The Department identifies in the Notice the constituencies it believes will be significantly affected. This may include, but is not limited to, students, legal assistance organizations that represent students, institutions of higher education, state student grant agencies, guaranty agencies, lenders, secondary markets, loan servicers, guaranty agency servicers, collection agencies, state agencies, and accrediting agencies. The Department welcomes nominations for representatives of other constituencies who are thought to be significantly affected. Before nominating an individual to participate as a negotiator, the nominator should confirm that the potential nominee can and will make the necessary time commitment to the process (see Q5&A5).
The Department selects negotiators for a committee from the list of nominees with the goal of providing adequate representation for the affected parties while keeping the size of the committee manageable. By law, a federal agency must limit membership on a negotiated rulemaking committee to 25 members unless the agency head determines that a greater number of members is necessary for the functioning of the committee, or to achieve balanced membership. Typically, the Department convenes committees of 12 to 15 negotiators, as well as an alternate for each negotiator to ease attendance concerns for negotiations consisting of multiple sessions. Each committee includes at least one Department representative.
Once members of a committee have been confirmed, the Department publishes another Notice in the Federal Register announcing the committee and its membership. The committee may also add members at the committee meetings, subject to the full committee’s approval.
Individuals who are not selected as negotiators but who will be affected by the regulations may still participate in the proceedings in several ways, such as having access to the individuals representing their constituency to express their views, and participating in informal working groups on issues between meetings. For more on the public’s role in the negotiated rulemaking process, see Q4&A4. Of course, individuals who are not selected as negotiators--like any other member of the public--can always submit comments in response to the published NPRM.
Is negotiated rulemaking open to the public?
Members of the public may observe meetings of the negotiating committee, but cannot speak unless recognized by the committee. Typically, at the end of each day’s meeting, the committee provides an opportunity for the public to comment. Caucuses (i.e., meetings of smaller groups of negotiators) are open to the public at the discretion of the negotiating committee.
Printed materials used by the negotiators are available to the public on the Department’s negotiated rulemaking Web site. The address for this Web site is announced in the Federal Register Notice announcing the members of the committee.
The committee protocols usually address how the negotiators may interact with the media.
How is the negotiated rulemaking process structured and what is the time commitment for a negotiator?
A negotiating committee usually meets for three sessions at roughly monthly intervals. Each session usually lasts three days. The number of sessions, meetings in a session, length of the session meetings, and the time between sessions may vary depending on the issues being negotiated.
The first order of business for a negotiating committee is to finalize the agenda and protocols, which are agreed upon by consensus of the committee. Once the agenda and protocols are finalized and agreed upon, the committee begins its negotiations of the issues on the agenda.
During the time between sessions, the Department drafts and amends the proposed regulatory language based on committee discussions and on any tentative agreements reached on the issues. The Department provides this draft regulatory language to the negotiators prior to the subsequent session. Subcommittees formed by the negotiators may meet during this time to work on specific issues. The subcommittees bring the results of their discussions to the full committee when it reconvenes. Again, a nominator should confirm that a potential nominee can and will make the necessary time commitment to the process before nominating an individual to participate.
How is consensus defined for purposes of negotiated rulemaking?
Consensus means that there is no dissent by any member of the negotiating committee. Thus, no member can be outvoted. The absence or silence of a member at the time the final consensus vote is taken is equivalent to not dissenting. All agreements reached during the negotiations are assumed to be tentative agreements until members of the committee consider all of the issues included on the agenda, and vote on the entire proposed regulatory language at the end of the final session of the negotiated rulemaking. If final consensus is achieved, committee members may not withdraw their consensus and the Department will use this consensus-based regulatory language in its NPRM. Only under very limited circumstances may the Department depart from this language.
What happens after the negotiations have concluded?
If consensus is achieved, the Department uses that regulatory language in its NPRM. If consensus is not achieved, the Department determines whether to proceed with regulations. If the Department decides to proceed with regulations, it may use regulatory language developed during the negotiations as the basis for its NPRM, or develop new regulatory language for all or a portion of its NPRM.
Once the proposed regulatory language for the NPRM is finalized, the Department drafts the preamble language (the portion of the NPRM that explains the proposed regulatory text). If consensus was reached, the Department usually shares the preamble language with the negotiators who may review it for accuracy. Although the preamble language is not negotiated, the Department may agree during the negotiations to include in the preamble explanations of certain issues. If the committee did not reach consensus, the preamble language is not shared with the negotiators.
When the NPRM is published in the Federal Register, it contains a request for public comments and a deadline for submitting those comments. If consensus was reached, negotiators and those persons and entities whom they represent may not comment negatively on the consensus-based regulatory language. The Department considers the comments received by the close of the comment period in developing final regulations. The final regulations published in the Federal Register contain the regulations with which affected parties must comply and the date by which they must do so. The preamble of the final regulations includes a summary of the comments received, the Department’s response to the comments, and an explanation of any changes made to the regulations that differ from the proposed regulations.
If Biden did something like this I might end up being to Biden what those wierdo MAGA people are for Trump.
I'm going to rock a Biden cap 24-7 like it's a Yankees fitted and I'll be at every rally wearing a Biden flag like a cape just like the MAGA groupies do
Summary of Final Rules for New Income Driven Plan (SAVE)
No rest for the wicked! It's been a long day but I know that folks have been very anxious to see what the new plan looks like. The Final Rules came out a little while ago and I'm going to give a quick and dirty summary of it before calling it a day. We could all use some good news so I didn't want people to have to wait.
Please please please read the OP before asking a question. If you ask and it's here I'm just not going to answer you. Not trying to be cranky but there's just too much volume right now to repeat something that's already here.
EDIT: I've done all i'm probably going to do tonight - but this covers about 90% or more of it. Later this weekend I'll try and clean it up and organize it to improve readability.
Tomorrow I'll be updating the TISLA website with all of the July 1st changes. And then I'm going to drink some gin and have a nap.
SAVE Plan
You can read the federal register here https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/nfridrriapra.pdf
Normally regulations require a certain time period between final rule posting and implementation. But in some cases the ED can exercise it's authority for early implementation. In this case they are doing so for the rule change that allows spousal income to be excluded from repaye/save when the borrower files taxes separately - that rule will be effective July 30th, 2023 (repaye applications received on or after that date I assume)
Part of this rule also allows for certain deferments to count towards the forgiveness counts prior to July 1, 2024. They are doing early implementation for this as well but don't have a date when they will start counting those. They will publish another notice when that is up and running.
Changes to consolidation IDR eligibility will be effective for consolidation loans disbursed on or after July 1, 2025. This is unusual. Usually such changes are effective for applications submitted on or after an effective date. This means anyone looking to take advantage of the Parent Plus double consolidation loophole will essentially need to ensure all steps are completed by that July 1, 2025 date.
The rest of the provisions are effective July 1, 2024
Maybe i missed it because i was going fast - but my understanding right this second is that the only part that will be available before repayment restart is repaye allowing exclusion of spousal income when filing taxes separately. My read is the actual fun stuff with SAVE won't be effective until July 1, 2024.
So SAVE is not an additional plan - it's a renamed and revised REPAYE.
I'm going to call the plan SAVE going forward to refer to the new version - repaye for the old version
Under the SAVE plan, 225% of the poverty level for the borrowers state and family size will be subtracted from their AGI/income. The repaye plan subtracts 150%, as does paye and both new and old ibr. ICR uses 100% Only SAVE/REPAYE are changing
The double consolidation loophole for Parent Plus borrowers will expire July 1, 2025. They have specifically said they will honor those already made and those fully made by that date. After that date, even double consolidated PP loans will only be eligible for ICR, graduated repayment and extended repayment. They can still qualify for PSLF, but will only have ICR as an option to do so. (I'm particularly salty about this and their long argument as to the why is full of nonsense IMO.)
The PAYE plan is being sunsetted. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back
The ICR plan is being sunsetted except for consolidated PP. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back. To repeat - this sunset doesn't apply to Parent Plus - ICR will still be available indefinitely for consolidated PP loans.
If as of July 1, 2024 you've made sixty or more payments under repaye you may not switch to the IBR plan. (i'll dig down on this provision more later)
Only the borrowers income will be used in the calculation of repaye/SAVE, IBR, ICR and Paye if they are single or married and filing separately.
For repaye/SAVE, IBR and paye - if both spouse's have loans and both incomes are provided the payment will be adjusted based on the spouse's loans (and income). Both spouse's do not have to be on an IDR or the same plan for this.
For ICR, both spouse's have to be on ICR specifically if both debts and income are to be used in the payment calculation.
In situations where both spouse's loans and income are being considered in the calculation - they will portion it as follows
"Dividing the outstanding principal and interest balance of the borrower’s eligible loans by the couple’s combined outstanding principal and interest balance on eligible loans;"
So they will determine a payment based on the combined income. Say it comes out to $1000. If spouse A has 70% of the total debt their payment will be $700 and spouse B's payment will be $300
Under the SAVE program, payments are calculated as follows:
-5% of discretionary income if the borrower only has undergraduate loans
-10% of discretionary income if the borrower only has graduate loans
-a proportionate percentage if the borrower has both. So for example, if a borrower had $50K in undergraduate and 50% in graduate they would use 7.5%. They are basing the proportion on ORIGNAL total loan balance - which I'm going to have to dig down on that clause as it begs a bunch of questions for me.
Payments under all of the IDR plans can be zero dollars if that's how the calculation works out. Zero dollar payments under these plans count towards both IDR and PSLF forgiveness. This is not a change.
Under the SAVE plan, any interest not covered by the calculated monthly payment is waived. This includes times when the borrower pays more than what is billed. So if your payment is 100 a month and your interest is 200, the ED will forgive the 100 - even if you decide to pay 300. This applies to all loans eligible for SAVE. Yes that includes graduate loans.
Under SAVE, forgiveness occurs after 300 months on the plan for graduate loans and consolidation loans that contain graduate loans.
Under SAVE forgiveness occurs after 240 months on the plan for undergraduate loans and consolidation loans that contain undergraduate loans.
If the borrower has both graduate and undergraduate - consolidated or not - the forgiveness is after 300 months. You cannot be on different plans for different loan types.
Under SAVE, if your original principal was $12K or less, forgiveness is after 120 payments. This is total - not per loan. so if you have three $10K loans this doesn't apply to you.
After $12K they add a year of required payments under the plan for ever $1K over the 12 you owe. So if you owe $13K, you get forgiveness if you still have a balance after 11 years on SAVE.
You get credit towards the forgiveness count for: -payments made under an IDR ($0 payments count) -payments made under a ten year standard or equivalent -cancer, unemployment, rehabilitation, military and economic deferment periods -Americorps forbearance periods -national guard forbearance -Department of defense forbearance -bankruptcy forbearance on or after July 1, 2024 if the borrower made the required payments
Other deferments and forbearances, including in school deferment, grace and financial hardship forbearance do NOT count - however see below for a hold harmless option for these period.
If the borrower has consolidated loans with different counts after the end of this year, they will get a weighted average of the underlying loans counts.
A borrower may obtain credit toward forgiveness for any months in which a borrower was in a deferment or forbearance not listed above by making an additional payment equal to or greater than their current IDR payment, including a payment of $0, for a deferment or forbearance that ended within 3 years of the additional repayment date and occurred after July 1, 2024.
Borrowers will be able to give blanket permission to access tax information. Otherwise they will have to provide it annually themselves. Borrowers will be able to initiate their intent to use an IDR plan and provide that tax info access in their promissory notes in the future.
Borrowers that initiate their intent for an IDR plan on their promissory note or future IDR application, and provide the blanket permission to access their tax info will automatically be entered into an IDR and recertified annually until they indicate otherwise. They will also auto-enroll borrowers into IDR plans if they are 75 days past due, or some defaulters. But only if the IDR plan would be lower than their current plan.
It appears borrowers will be removed from default if they prove that they are eligible for zero dollar idr payments and were at the time of default.
No rest for the wicked! It's been a long day but I know that folks have been very anxious to see what the new plan looks like. The Final Rules came out a little while ago and I'm going to give a quick and dirty summary of it before calling it a day. We could all use some good news so I didn't want people to have to wait.
Please please please read the OP before asking a question. If you ask and it's here I'm just not going to answer you. Not trying to be cranky but there's just too much volume right now to repeat something that's already here.
EDIT: I've done all i'm probably going to do tonight - but this covers about 90% or more of it. Later this weekend I'll try and clean it up and organize it to improve readability.
Tomorrow I'll be updating the TISLA website with all of the July 1st changes. And then I'm going to drink some gin and have a nap.
SAVE Plan
You can read the federal register here https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/nfridrriapra.pdf
Normally regulations require a certain time period between final rule posting and implementation. But in some cases the ED can exercise it's authority for early implementation. In this case they are doing so for the rule change that allows spousal income to be excluded from repaye/save when the borrower files taxes separately - that rule will be effective July 30th, 2023 (repaye applications received on or after that date I assume)
Part of this rule also allows for certain deferments to count towards the forgiveness counts prior to July 1, 2024. They are doing early implementation for this as well but don't have a date when they will start counting those. They will publish another notice when that is up and running.
Changes to consolidation IDR eligibility will be effective for consolidation loans disbursed on or after July 1, 2025. This is unusual. Usually such changes are effective for applications submitted on or after an effective date. This means anyone looking to take advantage of the Parent Plus double consolidation loophole will essentially need to ensure all steps are completed by that July 1, 2025 date.
The rest of the provisions are effective July 1, 2024
Maybe i missed it because i was going fast - but my understanding right this second is that the only part that will be available before repayment restart is repaye allowing exclusion of spousal income when filing taxes separately. My read is the actual fun stuff with SAVE won't be effective until July 1, 2024.
So SAVE is not an additional plan - it's a renamed and revised REPAYE.
I'm going to call the plan SAVE going forward to refer to the new version - repaye for the old version
Under the SAVE plan, 225% of the poverty level for the borrowers state and family size will be subtracted from their AGI/income. The repaye plan subtracts 150%, as does paye and both new and old ibr. ICR uses 100% Only SAVE/REPAYE are changing
The double consolidation loophole for Parent Plus borrowers will expire July 1, 2025. They have specifically said they will honor those already made and those fully made by that date. After that date, even double consolidated PP loans will only be eligible for ICR, graduated repayment and extended repayment. They can still qualify for PSLF, but will only have ICR as an option to do so. (I'm particularly salty about this and their long argument as to the why is full of nonsense IMO.)
The PAYE plan is being sunsetted. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back
The ICR plan is being sunsetted except for consolidated PP. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back. To repeat - this sunset doesn't apply to Parent Plus - ICR will still be available indefinitely for consolidated PP loans.
If as of July 1, 2024 you've made sixty or more payments under repaye you may not switch to the IBR plan. (i'll dig down on this provision more later)
Only the borrowers income will be used in the calculation of repaye/SAVE, IBR, ICR and Paye if they are single or married and filing separately.
For repaye/SAVE, IBR and paye - if both spouse's have loans and both incomes are provided the payment will be adjusted based on the spouse's loans (and income). Both spouse's do not have to be on an IDR or the same plan for this.
For ICR, both spouse's have to be on ICR specifically if both debts and income are to be used in the payment calculation.
In situations where both spouse's loans and income are being considered in the calculation - they will portion it as follows
"Dividing the outstanding principal and interest balance of the borrower’s eligible loans by the couple’s combined outstanding principal and interest balance on eligible loans;"
So they will determine a payment based on the combined income. Say it comes out to $1000. If spouse A has 70% of the total debt their payment will be $700 and spouse B's payment will be $300
Under the SAVE program, payments are calculated as follows:
-5% of discretionary income if the borrower only has undergraduate loans
-10% of discretionary income if the borrower only has graduate loans
-a proportionate percentage if the borrower has both. So for example, if a borrower had $50K in undergraduate and 50% in graduate they would use 7.5%. They are basing the proportion on ORIGNAL total loan balance - which I'm going to have to dig down on that clause as it begs a bunch of questions for me.
Payments under all of the IDR plans can be zero dollars if that's how the calculation works out. Zero dollar payments under these plans count towards both IDR and PSLF forgiveness. This is not a change.
Under the SAVE plan, any interest not covered by the calculated monthly payment is waived. This includes times when the borrower pays more than what is billed. So if your payment is 100 a month and your interest is 200, the ED will forgive the 100 - even if you decide to pay 300. This applies to all loans eligible for SAVE. Yes that includes graduate loans.
Under SAVE, forgiveness occurs after 300 months on the plan for graduate loans and consolidation loans that contain graduate loans.
Under SAVE forgiveness occurs after 240 months on the plan for undergraduate loans and consolidation loans that contain undergraduate loans.
If the borrower has both graduate and undergraduate - consolidated or not - the forgiveness is after 300 months. You cannot be on different plans for different loan types.
Under SAVE, if your original principal was $12K or less, forgiveness is after 120 payments. This is total - not per loan. so if you have three $10K loans this doesn't apply to you.
After $12K they add a year of required payments under the plan for ever $1K over the 12 you owe. So if you owe $13K, you get forgiveness if you still have a balance after 11 years on SAVE.
You get credit towards the forgiveness count for: -payments made under an IDR ($0 payments count) -payments made under a ten year standard or equivalent -cancer, unemployment, rehabilitation, military and economic deferment periods -Americorps forbearance periods -national guard forbearance -Department of defense forbearance -bankruptcy forbearance on or after July 1, 2024 if the borrower made the required payments
Other deferments and forbearances, including in school deferment, grace and financial hardship forbearance do NOT count - however see below for a hold harmless option for these period.
If the borrower has consolidated loans with different counts after the end of this year, they will get a weighted average of the underlying loans counts.
A borrower may obtain credit toward forgiveness for any months in which a borrower was in a deferment or forbearance not listed above by making an additional payment equal to or greater than their current IDR payment, including a payment of $0, for a deferment or forbearance that ended within 3 years of the additional repayment date and occurred after July 1, 2024.
Borrowers will be able to give blanket permission to access tax information. Otherwise they will have to provide it annually themselves. Borrowers will be able to initiate their intent to use an IDR plan and provide that tax info access in their promissory notes in the future.
Borrowers that initiate their intent for an IDR plan on their promissory note or future IDR application, and provide the blanket permission to access their tax info will automatically be entered into an IDR and recertified annually until they indicate otherwise. They will also auto-enroll borrowers into IDR plans if they are 75 days past due, or some defaulters. But only if the IDR plan would be lower than their current plan.
It appears borrowers will be removed from default if they prove that they are eligible for zero dollar idr payments and were at the time of default.
Yeah its still some hope for some radical changes.
FACT SHEET: President Biden Announces New Actions to Provide Debt Relief and Support for Student Loan Borrowers
June 30, 2023No President has fought harder for student debt relief than President Biden, and he’s not done yet. President Biden and Vice President Harris will not let Republican elected officials succeed in denying hardworking Americans the relief they need.
In light of the Supreme Court’s ruling this morning, President Biden and his Administration have already taken two steps this afternoon aimed at providing debt relief for as many borrowers as possible, as fast as possible, and supporting student loan borrowers:
- The Secretary of Education initiated a rulemaking process aimed at opening an alternative path to debt relief for as many working and middle-class borrowers as possible, using the Secretary’s authority under the Higher Education Act.
- The Department of Education (Department) finalized the most affordable repayment plan ever created, ensuring that borrowers will be able to take advantage of this plan this summer—before loan payments are due. Many borrowers will not have to make monthly payments under this plan. Those that do will save more than $1,000 a year.
These actions reflect the President’s belief that an education beyond high school should be a ticket to the middle class. It also builds on the unprecedented steps President Biden and his Administration have taken to make college more affordable for working and middle-class families and make federal student loans more manageable. The Biden-Harris Administration has:
- Secured the largest increases to Pell Grants in a decade.
- Fixed broken student loan programs such as Public Service Loan Forgiveness, so borrowers actually get the relief they deserve.
- Approved more than $66 billion in loan cancellation for 2.2 million borrowers across the country, including public service workers and those who have been defrauded by their colleges.
The President remains committed to providing relief to low- and middle-income borrowers. For too many Americans, a ticket to the middle-class remains out of reach because of unmanageable student loan debt. COVID-19 exacerbated that challenge – risking tens of millions of borrowers’ financial security and futures because of the economic harms brought on by a once-in-a-century pandemic.
Today, the Department initiated rulemaking aimed at opening an alternative path to debt relief for as many borrowers as possible, using the Secretary of Education’s authority under the Higher Education Act. The Department issued a notice, which is the first step in the process of issuing new regulations under this so-called “negotiated rulemaking” process. The notice announces a virtual public hearing on July 18th and solicits written comments from stakeholders on topics to consider.
Following the public hearing, the Department will finalize the issues to be addressed through rulemaking and begin the negotiated rulemaking sessions this fall. The Department will complete this rulemaking as quickly as possible.
Lowering Monthly Payments
The Biden-Harris Administration today also finalized the most affordable repayment plan ever created, called the Saving on a Valuable Education (SAVE) plan. This income-driven repayment plan will cut borrowers’ monthly payments in half, allow many borrowers to make $0 monthly payments, save all other borrowers at least $1,000 per year, and ensure borrowers don’t see their balances grow from unpaid interest.
Specifically, the plan will:
- For undergraduate loans, cut in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income.
- Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment under this plan.
- Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less. The Department estimates that this reform will allow nearly all community college borrowers to be debt-free within 10 years.
- Not charge borrowers with unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
Ensuring Support for Borrowers Most at Risk
To protect the most vulnerable borrowers, the Department is creating a temporary “on-ramp” to protect borrowers from the harshest consequences of late, missed, or partial payments for up to 12 months. While payments will be due and interest will accrue during this period, interest will not capitalize at the end of the on-ramp period. Additionally, borrowers will not be reported to credit bureaus, be considered in default, or referred to collection agencies for late, missed, or partial payments during the on-ramp period. Future monthly bills for borrowers not enrolled in an income-driven repayment plan will be automatically adjusted to reflect the accrued interest during those months.
Borrowers who can pay should do so, but this on-ramp period gives borrowers who cannot make payments right away the necessary time to adjust, enabling them to ultimately make their monthly payments and meet their financial obligations on their loans. Borrowers do not need to take any action to qualify for this on-ramp.
###
UPDATED Summary of SAVE/REPAYE Plan Final Rules
Please please please read the OP before asking a question. If you ask and it's here I'm just not going to answer you. Not trying to be cranky but there's just too much volume right now to repeat something that's already here.
SAVE Plan You can read the federal register here https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/nfridrriapra.pdf
You can read the fact sheet here https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf
REPAYE and SAVE are now the same plan and the names will be used interchangeably in the real world. For our purposes to avoid confusion I’m going to use repaye to talk about the current plan, and SAVE the new one. So SAVE is not an additional plan - it's a renamed and revised REPAYE. This renamed plan will continue to count for PSLF.
SAVE PLAN ELIGIBILITY
All Direct Loans (Direct subsidized and unsubsidized Stafford, Direct Graduate Plus, Direct consolidation in most cases) other than Parent Plus loans or consolidated PP loans are eligible – regardless of when the loan was made. Double consolidated PP loans are eligible – but only if the double consolidation was completed before July 1, 2025. Defaulted loans, FFEL loans and Perkins loans are not eligible – but can be made eligible by getting out of default and/or consolidating into the Direct Loan program at www.studentaid.gov
SAVE PLAN PAYMENT CALCULATION
Under the SAVE plan, 225% of the poverty level for the borrower’s state and family size will be subtracted from their AGI/income. The repaye plan subtracts 150%, as does paye and both new and old ibr. ICR uses 100%.
Only SAVE/REPAYE are changing in these areas.
Under the SAVE program, payments are calculated as follows:
-5% of discretionary income if the borrower only has undergraduate loans -10% of discretionary income if the borrower only has graduate loans -a proportionate percentage if the borrower has both. So for example, if a borrower had $50K in undergraduate and 50% in graduate they would use 7.5%. They are basing the proportion on ORIGNAL total loan balance - which I'm going to have to dig down on that clause as it begs a bunch of questions for me. Payments under all of the IDR plans can be zero dollars if that's how the calculation works out. Zero dollar payments under these plans count towards both IDR and PSLF forgiveness. This is not a change. SAVE PLAN INTEREST Under the SAVE plan, any interest not covered by the calculated monthly payment is waived. This includes times when the borrower pays more than what is billed. So if your payment is 100 a month and your interest is 200, the ED will forgive the 100 - even if you decide to pay 300. This applies to all loans eligible for SAVE. Yes that includes graduate loans. If your billed payment amount covers your monthly interest you will not get any interest forgiven. To be crystal clear – this benefit is based on what you are BILLED - not what you actually pay. So not paying won’t mean interest forgiveness if your billed payment covers that interest. And you don’t get the benefit if you don’t make the payment. Zero dollar calculated payments excluded of course.
SAVE FORGIVENESS Under SAVE, forgiveness occurs after 300 months on the plan for graduate loans and consolidation loans that contain graduate loans. Under SAVE forgiveness occurs after 240 months on the plan for undergraduate loans and consolidation loans that contain undergraduate loans. If the borrower has both graduate and undergraduate - consolidated or not - the forgiveness is after 300 months. You cannot be on different plans for different loan types. Under SAVE, if your original principal was $12K or less, forgiveness is after 120 payments. This is total - not per loan. so if you have three $10K loans this doesn't apply to you. After $12K they add a year of required payments under the plan for ever $1K over the 12 you owe. So if you owe $13K, you get forgiveness if you still have a balance after 11 years on SAVE.
PERIODS THAT COUNT TOWARDS FORGIVENESS You get credit towards the forgiveness count for: -payments made under an IDR ($0 payments count) -payments made under a ten year standard or equivalent -cancer, unemployment, rehabilitation, military and economic deferment periods -Americorps forbearance periods -national guard forbearance -Department of defense forbearance -bankruptcy forbearance on or after July 1, 2024 if the borrower made the required payments Other deferments and forbearances, including in school deferment, grace and financial hardship forbearance do NOT count - however see below for a hold harmless option for these periods. If the borrower consolidates loans with different counts after the end of this year, they will get a weighted average of the underlying loans counts. If they consolidate before that they will get the highest count due to the one time IDR adjustment. See my post history if you don’t know what that is. A borrower may obtain credit toward forgiveness for any months in which a borrower was in a deferment or forbearance not listed above by making an additional payment equal to or greater than their current IDR payment, including a payment of $0, for a deferment or forbearance that ended within 3 years of the additional repayment date and occurred after July 1, 2024.
TREATMENT Of SPOUSAL INCOME Only the borrowers income will be used in the calculation of repaye/SAVE, IBR, ICR and Paye if they are single or married and filing separately. But they will also exclude the spouse from the borrowers family size in this situation. For repaye/SAVE, IBR and paye - if both spouse's have loans and both incomes are provided the payment will be adjusted based on the spouse's loans (and income). Both spouse's do not have to be on an IDR or the same plan for this. For ICR, both spouse's have to be on ICR specifically if both debts and income are to be used in the payment calculation. In situations where both spouse's loans and income are being considered in the calculation - they will portion it as follows "Dividing the outstanding principal and interest balance of the borrower’s eligible loans by the couple’s combined outstanding principal and interest balance on eligible loans;" So they will determine a payment based on the combined income. Say it comes out to $1000. If spouse A has 70% of the total debt their payment will be $700 and spouse B's payment will be $300
AVAILABILITY OF OTHER PLANS The PAYE plan is being sunsetted. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back
The ICR plan is being sunsetted except for consolidated PP. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back. To repeat - this sunset doesn't apply to Parent Plus - ICR will still be available indefinitely for consolidated PP loans.
If as of July 1, 2024 you've made sixty or more payments under repaye you may not switch to the IBR plan. This is to prevent borrowers with graduate loans to be able to game the system and get forgiveness sooner.
Sunset of the Parent Plus double consolidation loophole The double consolidation loophole for Parent Plus borrowers will expire July 1, 2025. They have specifically said they will honor those already made and those fully made by that date. After that date, even double consolidated PP loans will only be eligible for ICR, graduated repayment and extended repayment. They can still qualify for PSLF,but will only have ICR as an option to do so. (I'm particularly salty about this and their long argument as to the why is full of nonsense IMO.)
If you don’t know that is or want to learn more about it while it’s still available see the consolidation page on the TISLA site, towards the bottom.
Automatic IDR Enrollment and Recertification Borrowers will be able to give blanket permission to access tax information via future IDR applications and promissory notes – but not until after July of next year or later.. Otherwise they will have to provide it annually themselves. Borrowers will be able to initiate their intent to use an IDR plan and provide that tax info access in their promissory notes in the future. When that happens you’ll go right into the lowest IDR plan as soon as you enter repayment with no action needed by you. Borrowers that initiate their intent for an IDR plan on their promissory note or future IDR application, and provide the blanket permission to access their tax info will automatically be entered into an IDR and recertified annually until they indicate otherwise. They will also auto-enroll borrowers into IDR plans if they are 75 days past due, or some defaulters. But only if the IDR plan would be lower than their current plan. This will mean no need to recertify annually but you’ll need to watch your bills for payment changes - especially those on ACH. You will be able to withdraw this permission at any time.
TIMING Borrowers already on repaye will automatically have their payments recalculated under the new formula – no reapplication needed. For those not enrolled in repaye already – hypothetically you can just apply for repaye now – and you’ll be given the save benefits after July 30th per the below. Normally regulations require a certain time period between final rule posting and implementation. But in some cases the ED can exercise its authority for early implementation. In this case they are doing so for the following pieces, which will be implemented July 30, 2023: • Only using the borrowers income in the repaye/save calculation when the borrowers files taxes separately. • Increasing the income exemption to 225 percent of the applicable poverty guideline in the REPAYE plan • Not charging accrued interest to the borrower after the borrower’s payment on REPAYE is applied • The Secretary also designates the changes to the definition of family size for Direct Loan borrowers in IBR, ICR, PAYE, and REPAYE in § 685.209(a) to exclude the spouse when a borrower is married and files a separate tax return for early implementation on July 30, 2023. Part of this rule also allows for certain deferments to count towards the forgiveness counts prior to July 1, 2024. They are doing early implementation for this as well but don't have a date when they will start counting those. They will publish another notice when that is up and running. Changes to consolidation IDR eligibility will be effective for consolidation loans disbursed on or after July 1, 2025. This is unusual. Usually such changes are effective for applications submitted on or after an effective date. This means anyone looking to take advantage of the Parent Plus double consolidation loophole will essentially need to ensure all steps are completed by that July 1, 2025 date. The rest of the provisions are effective July 1, 2024
DELINQUENT AND DEFAULTED BORROWERS Effective next year, borrowers who are at least 75 days past due on their loans and who have given the ED permission to access their tax information will be automatically enrolled in the lowest IDR plan they are eligible for as long as it’s not a higher payment than their existing payment. This is for future payments and periods only. Borrowers in default but not yet under wage garnishment or tax offset or litigation will be automatically given the IBR plan assuming they have previously given the ed permission to access their tax information. If it turns out they would have had a zero dollar payment at the moment of default they will be taken out of default automatically.
Defaulted borrowers placed on the IBR plan will get credit towards forgiveness when they make payments under that plan while in default – even involuntary payments such as wage garnishment. This includes payments that are equal to or exceed the ten year standard amount. These payments will also count towards loan rehabilitation assuming they are at least $5
For borrowers entering loan rehab not on IBR, rehab payments will be calculated as 10% of discretionary income – but no less than $5. Defaulted parent Plus
Please please please read the OP before asking a question. If you ask and it's here I'm just not going to answer you. Not trying to be cranky but there's just too much volume right now to repeat something that's already here.
SAVE Plan You can read the federal register here https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/nfridrriapra.pdf
You can read the fact sheet here https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf
REPAYE and SAVE are now the same plan and the names will be used interchangeably in the real world. For our purposes to avoid confusion I’m going to use repaye to talk about the current plan, and SAVE the new one. So SAVE is not an additional plan - it's a renamed and revised REPAYE. This renamed plan will continue to count for PSLF.
SAVE PLAN ELIGIBILITY
All Direct Loans (Direct subsidized and unsubsidized Stafford, Direct Graduate Plus, Direct consolidation in most cases) other than Parent Plus loans or consolidated PP loans are eligible – regardless of when the loan was made. Double consolidated PP loans are eligible – but only if the double consolidation was completed before July 1, 2025. Defaulted loans, FFEL loans and Perkins loans are not eligible – but can be made eligible by getting out of default and/or consolidating into the Direct Loan program at www.studentaid.gov
SAVE PLAN PAYMENT CALCULATION
Under the SAVE plan, 225% of the poverty level for the borrower’s state and family size will be subtracted from their AGI/income. The repaye plan subtracts 150%, as does paye and both new and old ibr. ICR uses 100%.
Only SAVE/REPAYE are changing in these areas.
Under the SAVE program, payments are calculated as follows:
-5% of discretionary income if the borrower only has undergraduate loans -10% of discretionary income if the borrower only has graduate loans -a proportionate percentage if the borrower has both. So for example, if a borrower had $50K in undergraduate and 50% in graduate they would use 7.5%. They are basing the proportion on ORIGNAL total loan balance - which I'm going to have to dig down on that clause as it begs a bunch of questions for me. Payments under all of the IDR plans can be zero dollars if that's how the calculation works out. Zero dollar payments under these plans count towards both IDR and PSLF forgiveness. This is not a change. SAVE PLAN INTEREST Under the SAVE plan, any interest not covered by the calculated monthly payment is waived. This includes times when the borrower pays more than what is billed. So if your payment is 100 a month and your interest is 200, the ED will forgive the 100 - even if you decide to pay 300. This applies to all loans eligible for SAVE. Yes that includes graduate loans. If your billed payment amount covers your monthly interest you will not get any interest forgiven. To be crystal clear – this benefit is based on what you are BILLED - not what you actually pay. So not paying won’t mean interest forgiveness if your billed payment covers that interest. And you don’t get the benefit if you don’t make the payment. Zero dollar calculated payments excluded of course.
SAVE FORGIVENESS Under SAVE, forgiveness occurs after 300 months on the plan for graduate loans and consolidation loans that contain graduate loans. Under SAVE forgiveness occurs after 240 months on the plan for undergraduate loans and consolidation loans that contain undergraduate loans. If the borrower has both graduate and undergraduate - consolidated or not - the forgiveness is after 300 months. You cannot be on different plans for different loan types. Under SAVE, if your original principal was $12K or less, forgiveness is after 120 payments. This is total - not per loan. so if you have three $10K loans this doesn't apply to you. After $12K they add a year of required payments under the plan for ever $1K over the 12 you owe. So if you owe $13K, you get forgiveness if you still have a balance after 11 years on SAVE.
PERIODS THAT COUNT TOWARDS FORGIVENESS You get credit towards the forgiveness count for: -payments made under an IDR ($0 payments count) -payments made under a ten year standard or equivalent -cancer, unemployment, rehabilitation, military and economic deferment periods -Americorps forbearance periods -national guard forbearance -Department of defense forbearance -bankruptcy forbearance on or after July 1, 2024 if the borrower made the required payments Other deferments and forbearances, including in school deferment, grace and financial hardship forbearance do NOT count - however see below for a hold harmless option for these periods. If the borrower consolidates loans with different counts after the end of this year, they will get a weighted average of the underlying loans counts. If they consolidate before that they will get the highest count due to the one time IDR adjustment. See my post history if you don’t know what that is. A borrower may obtain credit toward forgiveness for any months in which a borrower was in a deferment or forbearance not listed above by making an additional payment equal to or greater than their current IDR payment, including a payment of $0, for a deferment or forbearance that ended within 3 years of the additional repayment date and occurred after July 1, 2024.
TREATMENT Of SPOUSAL INCOME Only the borrowers income will be used in the calculation of repaye/SAVE, IBR, ICR and Paye if they are single or married and filing separately. But they will also exclude the spouse from the borrowers family size in this situation. For repaye/SAVE, IBR and paye - if both spouse's have loans and both incomes are provided the payment will be adjusted based on the spouse's loans (and income). Both spouse's do not have to be on an IDR or the same plan for this. For ICR, both spouse's have to be on ICR specifically if both debts and income are to be used in the payment calculation. In situations where both spouse's loans and income are being considered in the calculation - they will portion it as follows "Dividing the outstanding principal and interest balance of the borrower’s eligible loans by the couple’s combined outstanding principal and interest balance on eligible loans;" So they will determine a payment based on the combined income. Say it comes out to $1000. If spouse A has 70% of the total debt their payment will be $700 and spouse B's payment will be $300
AVAILABILITY OF OTHER PLANS The PAYE plan is being sunsetted. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back
The ICR plan is being sunsetted except for consolidated PP. If you aren't enrolled in that plan on July 1, 2024 you never can. If you are and then change plans after that date you can never go back. To repeat - this sunset doesn't apply to Parent Plus - ICR will still be available indefinitely for consolidated PP loans.
If as of July 1, 2024 you've made sixty or more payments under repaye you may not switch to the IBR plan. This is to prevent borrowers with graduate loans to be able to game the system and get forgiveness sooner.
Sunset of the Parent Plus double consolidation loophole The double consolidation loophole for Parent Plus borrowers will expire July 1, 2025. They have specifically said they will honor those already made and those fully made by that date. After that date, even double consolidated PP loans will only be eligible for ICR, graduated repayment and extended repayment. They can still qualify for PSLF,but will only have ICR as an option to do so. (I'm particularly salty about this and their long argument as to the why is full of nonsense IMO.)
If you don’t know that is or want to learn more about it while it’s still available see the consolidation page on the TISLA site, towards the bottom.
Automatic IDR Enrollment and Recertification Borrowers will be able to give blanket permission to access tax information via future IDR applications and promissory notes – but not until after July of next year or later.. Otherwise they will have to provide it annually themselves. Borrowers will be able to initiate their intent to use an IDR plan and provide that tax info access in their promissory notes in the future. When that happens you’ll go right into the lowest IDR plan as soon as you enter repayment with no action needed by you. Borrowers that initiate their intent for an IDR plan on their promissory note or future IDR application, and provide the blanket permission to access their tax info will automatically be entered into an IDR and recertified annually until they indicate otherwise. They will also auto-enroll borrowers into IDR plans if they are 75 days past due, or some defaulters. But only if the IDR plan would be lower than their current plan. This will mean no need to recertify annually but you’ll need to watch your bills for payment changes - especially those on ACH. You will be able to withdraw this permission at any time.
TIMING Borrowers already on repaye will automatically have their payments recalculated under the new formula – no reapplication needed. For those not enrolled in repaye already – hypothetically you can just apply for repaye now – and you’ll be given the save benefits after July 30th per the below. Normally regulations require a certain time period between final rule posting and implementation. But in some cases the ED can exercise its authority for early implementation. In this case they are doing so for the following pieces, which will be implemented July 30, 2023: • Only using the borrowers income in the repaye/save calculation when the borrowers files taxes separately. • Increasing the income exemption to 225 percent of the applicable poverty guideline in the REPAYE plan • Not charging accrued interest to the borrower after the borrower’s payment on REPAYE is applied • The Secretary also designates the changes to the definition of family size for Direct Loan borrowers in IBR, ICR, PAYE, and REPAYE in § 685.209(a) to exclude the spouse when a borrower is married and files a separate tax return for early implementation on July 30, 2023. Part of this rule also allows for certain deferments to count towards the forgiveness counts prior to July 1, 2024. They are doing early implementation for this as well but don't have a date when they will start counting those. They will publish another notice when that is up and running. Changes to consolidation IDR eligibility will be effective for consolidation loans disbursed on or after July 1, 2025. This is unusual. Usually such changes are effective for applications submitted on or after an effective date. This means anyone looking to take advantage of the Parent Plus double consolidation loophole will essentially need to ensure all steps are completed by that July 1, 2025 date. The rest of the provisions are effective July 1, 2024
DELINQUENT AND DEFAULTED BORROWERS Effective next year, borrowers who are at least 75 days past due on their loans and who have given the ED permission to access their tax information will be automatically enrolled in the lowest IDR plan they are eligible for as long as it’s not a higher payment than their existing payment. This is for future payments and periods only. Borrowers in default but not yet under wage garnishment or tax offset or litigation will be automatically given the IBR plan assuming they have previously given the ed permission to access their tax information. If it turns out they would have had a zero dollar payment at the moment of default they will be taken out of default automatically.
Defaulted borrowers placed on the IBR plan will get credit towards forgiveness when they make payments under that plan while in default – even involuntary payments such as wage garnishment. This includes payments that are equal to or exceed the ten year standard amount. These payments will also count towards loan rehabilitation assuming they are at least $5
For borrowers entering loan rehab not on IBR, rehab payments will be calculated as 10% of discretionary income – but no less than $5. Defaulted parent Plus
..so this underlined means that they'll automatically be recalculating my payment amount before the restart in Oct, right? Based on the 5% instead of 10%?
Joe Biden lays out new student debt relief plan after supreme court ruling
President says ‘the court misinterpreted the constitution’ as he announces intention to use another law for debt forgiveness
yup. here is a calculator to get an estimate https://www.studentloanplanner.com/income-based-repayment-calculator/
The big difference is in how the payment is calculated. Borrowers will need to pay between 5% and 10% of discretionary income, weighted by the percent of your loans from grad school (all undergrad pays 5% while all grad pays 10%). Discretionary income is now prior year AGI minus 225% of the poverty line, which is a much bigger deduction.
Word life... I'ma cool out until the end of the month then give these fools at my new loan servicer another ring
..thanks for the calculator, based on a rough estimate it looks like the new plan will cut my monthly payment by 40% (and I used my current salary number to be conservative).
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Can’t beat that! Good to hear!Word life... I'ma cool out until the end of the month then give these fools at my new loan servicer another ring
..thanks for the calculator, based on a rough estimate it look like the new plan will cut my monthly payment by 40% (and I used my current salary number to be conservative)
I'm also interested in seeing whether or not these folks have an accurate count of my total months paid so far. I know in the past, I changed programs at least once and at the time it was unclear whether my "forgiveness clock" reset when I made the change. It seems like the new policy is going to take any past payments into account though. So it's going to be important to track that down. I hope they didn't mysteriously loose track of my old payment history
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