Q&A: The New Student Loan Income-Driven Repayment Waiver

Starting in November 2022, borrowers who have been paying their federal student loans for 20 years or longer can expect to see the remainder of their debt discharged, while millions more will move significantly closer to forgiveness.

Income-driven plans offer reduced payments over 20 or 25 years, then forgiveness of the remaining balance. IDR was created in the 1990s to protect borrowers from financial hardship; payments are based on the borrowers’ income, not the balance owed.

These changes are the result of a new IDR waiver, announced by the Biden administration in April 2022, that bends the rules on which payments count. Now, every month you ever spent in student loan repayment or on pause since leaving school will count toward forgiveness — for one time only.

About 40,000 borrowers with older loans will see balances wiped clean in November, the Department of Education estimates, and more than 3.6 million borrowers are expected to receive at least three years of additional…

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This article was written by Anna Helhoski and originally published on www.nerdwallet.com