The Brandon jubilee presses on. Income based payment plans are planned to be at a lower pct of discretionary income, the threshold for discretionary income is planned to be higher, and govt will cover/prevent interest from accruing. Obviously not as good as blanket forgiveness, but this is very good to prevent kids/grown kids from being crushed by snowballing debt payments.
And, while this is essentially what was announced last August, it appears at least to more clearly cover grad loans, and this, to my recollection, is the first time that the administration has confirmed continued interest in this policy. Not out of the woods obviously, but an encouraging sign.
Any idea how marital status or being claimed as a dependent affects the loan forgiveness?
It's always so fucking hard to find info about that. Want to know if my income will be included in my partner's means-testing
Okay, so I believe this is how it works: Discretionary income is a function of the poverty threshold, and the poverty threshold is a function of household income and size.
The proposal will put the discretionary income threshold at 225% of the poverty threshold. If it's just the two of you, this results in discretionary income at anything over $44,370. So you would all would be paying 5pct of the difference between your net income and discretionary income. And if your net income is less than that $44,370 level, you pay nothing. And in any case no interest accrues, and loans are forgiven after 20 or 25 years of "payments" (no matter the principle).
https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines
Thank you so much! That clarifies things tremendously. Do you know if "households" only applies to married couples or does it also also apply to unmarried partners?
sure thing. i'm afraid i might get this wrong, but my sense is that unmarried couples are two separate households for tax or state administrative purposes, except for if one of you is claiming the other as a dependent (which i might infer from your initial question): in such a case, i believe that you are counted as a single household.
Gotcha, yep good inference - thanks for the help understanding what's going on! Tax stuff and money stuff makes my head spin, I really appreciate it
no sweat. hope this goes through and makes things a bit easier.
i'll see if i can figure it, but here's the "fact sheet" in the meantime.
https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfin.pdf?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=