# Student Loan Borrower Relief Act: What It Actually Does

This bill makes significant changes to how federal student loans work, particularly focusing on making monthly payments more affordable and getting loans forgiven faster for people working in public service jobs. The changes apply to income-driven repayment plans, which are programs that let borrowers base their monthly payments on how much money they actually earn rather than the full loan amount.

The most immediate change affects monthly payments. Under current rules, borrowers on income-driven plans can pay up to 15 percent of their income above the poverty line. This bill cuts that to 10 percent, meaning your monthly payment would be smaller. It also raises the income threshold that's protected from loan payments—instead of counting income above 150 percent of the poverty line, it would count income above 250 percent of the poverty line. In practical terms, this means more of your income stays off-limits before loan payments kick in. For example, if you're a single person earning $35,000 a year, more of that income would be considered necessary for basic living expenses and wouldn't count toward your loan payment calculation.

The bill also addresses a frustrating situation where borrowers' monthly payments don't cover the interest that's accumulating on their loans. Currently, that unpaid interest gets added to the loan balance, making the debt grow even though you're making payments. Under this bill, if your payment doesn't cover the interest, the government would cancel that unpaid interest instead of letting it pile up—though there are some limits on when this applies. Additionally, the bill shortens the repayment period from 25 years to 15 years for income-driven plans, meaning you'd be done paying sooner.

For people working in public service—teachers, nurses, government employees, and nonprofit workers—the bill dramatically speeds up loan forgiveness. Currently, you need to make 120 monthly payments (10 years) to get your remaining balance forgiven. This bill cuts that to just 12 monthly payments (1 year), but instead of forgiving everything at once, it forgives your loans gradually: 5 percent after year one, another 5 percent after year two, 10 percent after year three, and so on, until your entire loan is forgiven after 10 years of public service work. This means public service workers would start seeing real debt reduction much faster than they do now.

Student Loan Borrower Relief Act

Wilson, Frederica S.

Student Loan Borrower Relief Act This bill revises income-driven repayment plans for federal student loans, including by reducing from 25 years to 15 years the maximum repayment period under these plans. Additionally, the bill makes changes to the Public Service Loan Forgiveness program, including by cancelling a portion of a borrower's student loans after every 12 months of eligible public service employment.