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Originally Posted by Edward64
If he wants, I'd think he can come up with some sort of reason for a new pause as repayments re-start in Sep.
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... and here's his solution.
I'm thinking its more of a "here's 12 more transition/months before you really have to start paying off student debt". He probably should have come up with a 20-24 month transition period for after elections. But a pretty good kick-the-can down the road.
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"On-ramp" for resuming payments: Biden said his administration will also create a temporary 12-month "on-ramp repayment program," aimed at helping borrowers who will need to make difficult decisions when payments resume in October.
Rather than letting people slide into deeper financial trouble when they miss payments on the front end, Biden said the on-ramp will temporarily remove the threat of default or having a borrower's credit damaged for years to come.
"This is not the same as the student loan pause," Biden said. "Monthly payments will be due," bills will go out and interest will start accruing.
"If you can pay your monthly bills, you should," the president continued. But if you can't, the on-ramp will help prevent financial ruin.
The Department of Education won't refer borrowers with missed payments to credit agencies for 12 months "to give them a chance to get back up and running," Biden said.
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Also ...
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The president also announced that his administration will reduce the level of income-driven repayments from 10% to 5% of a borrower's disposable income. (Through this program, borrowers pay a fixed rate determined by their income for a set period of time, and are forgiven any remaining balance at the end of that period.)
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If/when I have grandkids that need a student loans, I'm definitely going to tell them to go government route.