Student loan borrowers can begin applying for lower payments

As federal student loan borrowers prepare for repayments to begin after a three-and-a-half-year hiatus, the federal government has launched a websitefor borrowers to begin applying for income-driven repayment plans.

The website was scheduled to launch Aug. 1, but was up a day early. The website automatically imports income information from the Internal Revenue Service. A Scripps News reporter was able to import all of the needed information within five minutes. Those who apply for income-driven repayment plans will need to have their income re-certified yearly.

The newest income-driven repayment plan implemented by the Biden administration means most borrowers will have lower monthly payments than before the pandemic. Now, borrowers with only undergraduate loans will be expected to pay 5% of their discretionary income. The amount considered discretionary income increased to 225% of the federal poverty level.Previously, a borrower with undergraduate loans with a family of four with an income of $70,000 living in the continental U.S. would have been expected to pay about $2,500 a year — or $208 a month — in payments.

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