By Staff Writer: Grace Anders<\/p>\n\n\n\n
A new administration brings noteworthy changes to student loan repayment plans. According to a survey by US News with 1,190 participants, only 20 percent of college students fully understand these changes, while 19 percent don\u2019t understand the changes at all, 39 percent somewhat understand, and 22 percent don\u2019t grasp how they will be affected by the changes. Here is a breakdown of what the new repayment plan means for student loan borrowers. <\/p>\n\n\n\n
Historically, IDR (Income Driven Repayment) plans base your monthly payment on your discretionary income, which has been calculated as your income minus 150 percent of the federal poverty guideline according to location and family size. The Biden administration ushered in a new plan called SAVE that increased that percentage from 150 percent to 225 percent, effectively lowering monthly payments with payments as low as $0 for millions of borrowers. SAVE also reduced the percentage of discretionary income that payments are based on from 10 percent to 5 percent. <\/p>\n\n\n\n
SAVE was suspended in July 2024 and a new student loan repayment plan called RAP (Repayment Assistance Program) was signed in with the passing of the Big Beautiful Bill. RAP is set to replace all IDRs by July 2028. Unlike IRD\u2019s of the past, RAP will base monthly payments on AGI (adjusted gross income) instead of discretionary income. There will no longer be $0 payments for any borrowers, and the minimum payment will be $10 a month for borrowers earning $10,000 a year or less. RAP has 10 tiers for borrowers earning more than $10,000 a year, starting at 1 percent of AGI for incomes between $10,000-$20,000 and increasing by 1 percent for each $10,000 incremental increase. RAP allows borrowers to reduce their payment by $50 a month for each dependent they claim on their taxes. Another unique feature of RAP is a principal payment match for borrowers paying less than $50 a month. While IDRs of the past offered student loan forgiveness after 20-25 years of payments, RAP\u2019s minimum term for forgiveness is 30 years. <\/p>\n","protected":false},"excerpt":{"rendered":"
By Staff Writer: Grace Anders A new administration brings noteworthy changes to student loan repayment plans. According to a survey by US News with 1,190 participants, only 20 percent of college students fully understand these changes, while 19 percent don\u2019t understand the changes at all, 39 percent somewhat understand, and 22 percent don\u2019t grasp how they will be affected by the changes. Here is…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1092","post","type-post","status-publish","format-standard","hentry","category-news"],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=\/wp\/v2\/posts\/1092","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1092"}],"version-history":[{"count":1,"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=\/wp\/v2\/posts\/1092\/revisions"}],"predecessor-version":[{"id":1093,"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=\/wp\/v2\/posts\/1092\/revisions\/1093"}],"wp:attachment":[{"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enmuthechaseonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}