The new IDR Plan expected out in July before the payment pause ends will not exactly be a new plan. Instead of confusing borrowers and making yet another IDR plan, the Department of Education has decided to modify the terms of the existing Repaye plan to try and simply things. While some of us are a little worried that this process would enable a future administration to change the terms back, we do feel that the steps underway will be a huge improvement for federal student loan borrowers. Also, it would be difficult for a new administration to back date substantive negative changes so while we don’t expect this to occur, it’s in the back of our minds.
The changes are underway now and a formal 30 day comment period commenced a few days ago. If the terms do not meaningfully change before implementation this summer or fall, here’s what to expect: