As the federal student loan pause is coming to an end, the Biden administration will offer new flexibilities to borrowers. They have decided to benefit 40 million borrowers with new relaxations.
These 40 million student loan borrowers can benefit from new flexibilities once the repayment resumes in the fall of 2023. President Biden and Speaker McCarthy reaffirmed the repayment dates with the Debt Ceiling Bill. It was extensively discussed in the US Congress.
As per the deal and ruling of lower courts on the Student Loan Forgiveness Plan, borrowers have to resume payment 60 days after 30th June 2023.
7 New Flexibilities for Federal Student Loan Borrowers As Repayment Resumes
Even though the repayment will resume in August-September of 2023, borrowers can leverage the following flexibilities to smoothen the transition:
- Primarily, borrowers can self-declare their IDR (Income-Driven Repayment) to reduce federal student loan payments.
- Furthermore, the US Education Department has temporarily postponed the IDR rectification dates for 40 million borrowers.
- In addition, student loan borrowers who paid Equated Monthly Instalments (EMIs) during the Student Loan Pause will get refunds.
- Moreover, the Biden administration has redefined Public Service Loan Forgiveness (PSLF) clauses. Borrowers who opted for loan forgiveness through Public Service Loan Forgiveness will have a relaxed application process.
- Further, student loan borrowers will not get penalised for defaulting on their payments in the past. With the ‘Fresh Start Program’ the US government will ensure that borrowers do not receive collection calls or become victims of involuntary collections.
- Additionally, borrowers could get a 50% relaxation on monthly loan payments. The new and improved IDR Plan of the Biden administration might introduce this rebate.
- Finally, the Biden administration is also planning to provide a grace period to borrowers at the end of the pause. During the student loan pause period, the US Department of Education will not charge late fees to borrowers.
To get the latest information on study abroad loans and international money transfers, stay in tune with Fly Finance News Desk.
