Student Loans: 5 Biggest Winners of Biden’s New IDR Plan
The revised plan subtract 225% of the federal poverty guideline from your income, sheltering more of your earnings. That same $75,000 household would see payments based on just $7,500 of discretionary income. On top of that, undergraduate loan payments would be capped at 5% of discretionary income, instead of at least 10% under current plans, shrinking monthly payments for the example household from $250 to about $31.
This is a meaningful change for borrowers who live in expensive areas where housing, food and other costs cut further into discretionary income, explains Betsy Mayotte, president and founder of The Institute of Student Loan Advisors.