News Digest: United States commits to right faulty student loan schemes
April 25, 2022
News Digest:
Millions of student loan borrowers stand to benefit as the US Department of Education steps in to fix the income-driven repayment (IDR) plans. This follows years of lawsuits and complaints from loan takers who struggled with long term forbearance on their education loans.
Takeaway:
Washington termed the IDR plans’ longstanding flaws and mismanagement as “inexcusable” and said it would ensure that these loans deliver the promised affordable monthly payments as low as $0 and loan forgiveness after 20 to 25 years. The changes could result in an immediate debt waiver for 40,000 borrowers.
In addition to the several thousand who would benefit under the IDR debt cancellation scheme. Data revealed in 2021 that 4.4 million borrowers were repaying loans for at least 20 years with only 32 getting the cancellation benefits under the IDR scheme.