Chicago — The last 12 months were interesting as far as federal student loan developments go. Some borrowers had their loans forgiven while others made their first payments in October amid the conclusion of the pandemic forbearance. Additionally, 2023 saw the Biden administration launch a new income-driven repayment plan that aims to make repayment more affordable for borrowers.
As more borrowers continue to navigate their student loan situations, here are some potentially positive things to keep an eye out for in 2024:
Employer student loan payment matching
Employers may offer a new benefit that can help you pay off your student debt while saving for retirement. Under a new provision under the Secure 2.0 Act, employers will be allowed to match employee’s loan payments with a contribution to their workplace retirement account.
SAVE Plan payments will get lower
On a SAVE IDR plan, your monthly payment is set at 10% of your discretionary income. In the summer of 2024, that calculation will drop to 5% of discretionary income for some undergraduate borrowers. Depending on their starting balance, borrowers will pay a weighted average between 5% and 10%.
Quicker path to forgiveness for small initial balances
In 2024, those who borrowed $12,000 or less will have remaining balances forgiven after 10 years of repayment or an additional year for every $1,000 borrowed above $12,000.
Noah Johnson (he/him/his) is a Chicago-based journalist. Follow him on X: @noahwritestoo.
Edited by NaTyshca Pickett