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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. As the Biden administration waits to make a final decision on federal student loans, Republicans have proposed a new bill that would reform key aspects of the federal student loan system but also block any possibility of mass debt cancellation. Here’s what to know about this week’s student loan trends and how they may affect you. 1 current trend within student loans for the week of Aug 15 2022
1 House Republicans introduce bill to reform federal student loan system
On Aug. 3, House Republicans introduced the , which would reform key aspects of the current student loan system. Notably, the bill would eliminate certain existing student loan forgiveness programs and expand Pell Grant access. Here are the key proposals in the bill: Consolidate to a single plan, which would no longer forgive remaining loan balances at the end of the plan. Instead, borrowers would make income-based payments ($25 minimum) until they have repaid the equivalent of a standard repayment plan, though interest would stop accruing after 10 years. Limit graduate borrowers to $25,000 annually and $100,000 aggregate in federal student loans. Eliminate the grad PLUS loan program. Give schools the authority to limit how much students can borrow under certain circumstances. Eliminate the program for new borrowers. Expand access to short-term programs, such as those offered by vocational or technical schools. Prohibit the Education Department or the president from wiping out student debt or making further changes to student loan policy that would increase government costs. How this affect student loans
The bill could go into effect as soon as next year if Republicans take control of the U.S. House, as . However, nothing about the bill is certain yet. For borrowers, the result of the bill is a mixed bag. Parts of the bill, such as the limit on graduate borrowing, are intended to rein in the long-term costs of an education, and the expansion of the Pell Grant program could help students who are pursuing workforce programs. On the other hand, the elimination of the PSLF program and the reforms to income-driven repayment could make it harder for low-income borrowers to get out from under their balances in a timely manner. Loan Student Key takeaway The proposed REAL Reforms Act would eliminate the possibility of student loan cancellation but expand programs like the Pell Grant. Here s how you can get prepared
Whether you’re new to student loans or well into repayment, it’s wise to stay informed about how your could change. During 2022, more opportunities for cheaper loans or loan forgiveness could open up; keep an eye on the for the latest trends. SHARE: Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. Related Articles