Student Loan Expert Explains U.S. House Vote to Repeal Forgiveness and Repayment Programs
Massive delays and growing uncertainty about student loan repayment plans are causing anxiety for many borrowers. Early Thursday morning, the U.S. House voted to repeal several key student loan forgiveness and repayment programs.
KDKA Consumer Investigator Meghan Schiller spoke with a student loan expert to help borrowers understand the potential impact.
Major Changes Proposed in House Legislation
On Thursday, House Republicans passed what former President Trump referred to as his “one big beautiful bill.” The bill proposes sweeping reforms to student loan forgiveness and repayment structures.
Although it’s still early in the process, the proposed legislation marks a significant step toward changing how student debt is managed in the U.S. Among the changes being considered are:
- A complete overhaul of income-driven repayment plans
- A new repayment assistance program
- Caps on borrowing amounts for students
Expert Advice: Don’t Panic, But Be Prepared
Amy Lins, Vice President of Customer Success at Money Management International, urged borrowers to stay informed but not to panic just yet.
“There’s a lot of details that are still to come, so I wouldn’t panic quite yet, but people do need to be thinking about, ‘what do I need to do with my budget if my payment is going to increase?’” said Lins.
Key Repayment Plans on the Chopping Block
The legislation would eliminate the following repayment options:
- Income-Contingent Repayment (ICR) Plan
- Pay As You Earn (PAYE) Plan
- Saving on a Valuable Education (SAVE) Plan
Borrowers currently on these plans could be automatically moved into a revised version of the Income-Based Repayment (IBR) plan, which may result in higher monthly payments.
The bill also introduces a new repayment option: the Repayment Assistance Plan (RAP), another income-driven model.
Tools and Tips for Borrowers
Lins strongly encourages borrowers to use the loan simulator calculator at studentaid.gov to model potential changes and plan accordingly.
“You got to really start to kind of go into beast mode, right? Go into that beast mode of like, ‘OK, how do I increase my income? How do I decrease my expenses? What is my drop-dead number on what I can pay? Do I have to tweak my lifestyle? Do I have to start thinking about economizing?’” she said.
Blocking Future Forgiveness Programs
In addition to overhauling current repayment options, the bill also seeks to prevent the Department of Education from enacting new broad student loan forgiveness programs through regulatory action, as attempted by former President Biden.