Future Forum Statement on New Money Saving Rules on Student Loan Repayment from Biden Administration

WASHINGTON, D.C. — Today, the Future Forum Caucus Co-Chairs released the following statement after the U.S. Department of Education proposed new rules to reduce the cost of student loan payments for low and middle-income borrowers.

"Getting an education and the skills needed to get a good job are key to ensuring everyone can have a shot at living their version of the American dream, and lowering the burden of student debt is critical to achieving that goal. These new rules do just that and will save the average borrower thousands of dollars. Young people need action to lower costs, and the Future Forum applauds the Administration's actions to improve student loan repayment plans across the board," said Future Forum Co-Chairs Colin Allred, Haley Stevens, and Darren Soto.

The proposed changes would reduce monthly debt payments, for all kinds of students, but especially for low and middle-income borrowers, community college students and borrowers who work in public service.

The proposed rules amend the terms of the Revised Pay As You Earn (REPAYE) plan to offer $0 monthly payments for any borrower who makes less than $30,600 annually and any borrower in a family of four who makes less than about $62,400. The rules would also cut in half monthly payments on undergraduate loans for borrowers who do not otherwise have a $0 payment in this plan. The changes also ensure that a borrower's balance will not grow due to unpaid interest after making their monthly payment.

Overall, the Department of Education estimates that the plan would have the following effects compared to the existing REPAYE plan:

• Future cohorts of borrowers would see their total payments per dollar borrowed decrease by 40%. Borrowers with the lowest projected lifetime earnings would see payments that are 83% less, while those in the top would only see a 5% reduction.
• A typical graduate of a four-year public university would save nearly $2,000 a year relative to the current REPAYE plan.
• A first-year teacher with a bachelor's degree would save more than $17,000 in total payments while pursuing Public Service Loan Forgiveness—a two-thirds reduction in what they would pay in total under REPAYE. 
• 85% of community college borrowers would be debt-free within 10 years
• On average, Black, Hispanic, American Indian, and Alaska Native borrowers would see their lifetime payments per dollar borrowed cut in half.

Read the press release from the Department of Education here.

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