February 9, 2023
The Biden Administration’s New REPAYE Plan: Thinly Veiled Blanket Student Loan Forgiveness
On January 11, the Department of Education proposed new regulatory changes to income-driven repayment (IDR) plans for federal student loans – particularly the Revised Pay As You Earn Repayment Plan, or REPAYE – that focus on lowering repayment and expanding forgiveness. In a new insight, Data and Policy Analyst Tom Lee walks through these proposed changes and explains how they would serve as a form of blanket forgiveness.
- If finalized, IDR would become a form of blanket loan forgiveness, as it would dramatically reduce or eliminate the amount federal loan student borrowers would have to pay back.
- As with earlier blanket loan forgiveness, these changes to IDR would do nothing to lower the rising costs of higher education, and instead simply shift students’ loan balances to taxpayers.
- The proposed changes to IDR would be made through the negotiated rulemaking process, and as such, they would become a permanent part of the federal student loan system.