House Republicans have proposed a significant overhaul of federal student loan repayment through the “Student Success and Taxpayer Savings Plan.” This plan aims to simplify the current system, which offers borrowers about 12 repayment options, down to just two: a structured repayment plan with fixed payments over 10 to 25 years, and an income-driven repayment option known as the “Repayment Assistance Plan” (RAP).
Under the RAP, borrowers’ monthly payments will be calculated as a percentage of their income, scaling from 1% to a maximum of 10% based on earnings. Unlike existing income-driven plans that provide loan forgiveness after 20 or 25 years, the new GOP proposal extends the repayment period to 30 years without offering debt cancellation. Additionally, it eliminates protections on income, which currently shield a portion of earnings from being counted toward repayment.
The proposal aims to relieve taxpayer burdens associated with student loans, coinciding with President Donald Trump’s planned tax cuts. Notably, payments made under this plan would not accrue interest, and parents would receive a monthly discount of $50 on their payments for each child.
Importantly, these new repayment options will apply only to loans disbursed after July 1, 2026, meaning existing borrowers can still access most of the current repayment plans available to them. This shift reflects a broader effort by House Republicans to reform the financial aid system amidst ongoing discussions about student debt in the U.S.
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