Easier Federal Student Loan Repayment: New Rules and Tax Deductions.
This bill introduces a new income-contingent repayment program for federal undergraduate student loans, making monthly payments dependent on income. Loans will be interest-free, and payments made can be tax-deductible, potentially easing the financial burden on many students and graduates.
Key points
New undergraduate student loans will be interest-free starting July 1, 2023.
Existing undergraduate student loans can be converted to interest-free loans starting July 1, 2023.
An income-contingent repayment plan will be implemented, with payments automatically withheld from wages based on income relative to the poverty line.
Low-income individuals (below 337% of the poverty line) will have $0 monthly payments.
After 360 monthly payments (30 years), any remaining loan balance will be canceled and will not be taxed.
Payments made on these loans will be tax-deductible, reducing taxable income.
Employers are prohibited from using information about an employee's loan balance against them.
Status:
Expired
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