Department of Education Proposes Reforms to Income-Driven Repayment Plans

The Biden Administration recently announced its plan to reform income-driven repayment regulations. For the last year, the Biden Administration has proposed changes to several student aid and loan forgiveness programs, including IDR plans. In this announcement, the regulation would amend the Revised Pay as You Earn (REPAYE) repayment plan by not requiring student borrowers with an annual income below $30,500 to make monthly payments on their loans. Additionally, borrowers with undergraduate loans would only be required to pay 5 percent of their discretionary income on loans. Borrowers who have only graduate school loans would still pay 10 percent. A fact sheet on the changes can be found here.

Also, the Department of Education’s Office of Federal Student Aid released a dear colleague letter regarding community service requirements for the Federal Work Study program. The letter reminds institutions that mentoring positions, including for the purposes of tutoring, in public K-12 schools fulfill the community service requirement in the program.