Department of Education to propose lower payments for student loan borrowers

The Department of Education is proposing lower student loan payments for millions of people.

It's part of the Biden administration's plan to change the existing income-driven repayment program.

The administration hopes to “transform college financing and reduce future borrowers’ total payments per dollar by $0.40, while targeting that help on low- and middle-income borrowers,” Deputy Secretary James Kvaal told reporters. The plan would create a “true student loan safety net,” he said.

It would also pause payments for anyone making less than $30,600 a year.

In addition, there would no longer be a charge for unpaid monthly interest. Smaller loans would be forgiven after 10 years of payment.

The Biden administration is now seeking feedback from the public. A final rule could be released later this year.