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Biden administration forgives $39 billion in student debt for more than 800,000 borrowers (www.cnbc.com)

submitted 1 year ago by [email protected] to c/[email protected]

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[–] [email protected] 9 points 1 year ago (1 children)

The relief is a result of fixes to the student loan system’s income-driven repayment plans. Under those repayment plans, borrowers get any remaining debt cancelled by the government after they have made payments for 20 years or 25 years, depending on when they borrowed, and their loan and plan type.

Both parties are going to act like this is some giant thing...

But the people eligible are already in their 40s. If this was holding them back from buying a house, they'll have mortgage payments till their 70s.

Better than nothing, but a perfect example of "too little, too late".

[–] [email protected] 11 points 1 year ago* (last edited 1 year ago) (1 children)

The forgiveness applies to anyone who enrolls in the new plan, not just existing loans.

New plan is 10 yrs for <= $12k in loans, increasing a year for every $1k additional, so for example, someone who takes out $20k in loans can have the remainder forgiven after 18yrs of payments.

The 20/25 yrs was the old forgiveness plan with lower principal loan and income levels.

Additionally, if you're making your monthly payments, no interest accrued.

[–] [email protected] 4 points 1 year ago

The "no interest accrued" bit is huge for the medical community. Newly graduated doctors with hundreds of thousands in loans were getting absolutely ruined by runaway interest while they were in residency on income driven repayment plans. Now, combine the SAVE plan with PSLF, and medical school is suddenly a lot more viable as an endeavor.