The Biden administration is pushing forward with another approach to tackling the student debt crisis while its main initiative, a plan to forgive up to $20,000 in student loans per borrower, remains mired in legal limbo.
Even if the debt-forgiveness effort is struck down by the courts, the Department of Education’s Plan B could help millions of borrowers by overhauling income-driven repayment plans. It also addresses some of the worst pitfalls of student debt, such as “negative amortization,” or when a person’s loan balance keeps growing despite their consistently making payments.
The plan to reform income-driven repayment plans, or IDRs, was first announced in August but was overshadowed by the Biden administration’s blueprint for…
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