The White House is offering a new route to repay federal loans under far more generous terms
. The Biden administration submitted its brief last week, with oral arguments slated for Feb. 28.
If it's finalized, the proposal would give a major overhaul to income-driven repayment plans — one of several payment options offered by the federal government. The resulting plan would have lower monthly payments, an easier path to forgiveness and a promise that unpaid interest will not be added to a borrower’s loan balance.
The federal government now offers four types of income-driven plans, but the proposal would mostly phase out three of them while focusing on one simplified option, scaling back the confusing array of options borrowers now face. As long as borrowers make their monthly payments, any unpaid interest would not be charged. The change is meant to prevent borrowers from having unpaid interest added to their loan balance, a practice that can cause debt to snowball even as borrowers make payments.
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