For the 26 million Americans who had already applied with the Department of Education for the one-time loan cancellation of $10,000 – $20,000, as well as for all of the 45 million federal borrowers, the repayment clock will start ticking again, after three years of relief.When do my payments restart?
If your life has changed, whether due to more debt or a drop in earnings, check out the DOE Loan Simulator to determine if a different repayment plan better meets your needs or if consolidation might help.The day of the decision, President Joe Biden unveiled what he called an on-ramp for repayment that acknowledges that although most student loan borrowers have outstanding debt that is less than $25,000 on their own educational loans, there could be a readjustment period.
Earlier this year, the Biden administration proposed changes to IDRs, which would cap payments at 5% of income. That change would raise the amount of income that is protected from repayment, and would forgive loan balances after 10 years of payments, instead of 20, for borrowers with original loan balances of $12,000 or less.