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Ferguson Introduces Legislation to Streamline Student Loan Repayment

Congressman Drew Ferguson (R-Ga.) today introduced H.R. 4372, the Help Students Repay Act, legislation which would consolidate the complicated web of income-driven student loan repayment plans. Currently, student loan borrowers must choose from nine different loan repayment plans, five of which are income-driven. Ferguson’s legislation would replace these five plans with a single, simplified income-based repayment plan.

“Our current student loan repayment process is too complex, which only makes it more difficult for borrowers to successfully repay their loans,” said Ferguson. “We must empower borrowers to make active progress towards repayment. My bill would simplify the repayment process and give borrowers the opportunity to pay down their loans based on their income, reducing their risk of default.”

Borrowers across the country hold nearly $1.4 trillion in student loan debt. In the past three years alone, 580,000 of these borrowers have defaulted.

Under the standard repayment plan, a borrower’s monthly payments are determined by the loan amount and accumulated interest over a ten-year period. While this may work for some borrowers, many find themselves struggling to pay if they have lower incomes. Under Ferguson’s income-based repayment plan, a borrower’s monthly payment would be set at 15% of his discretionary income. The repayment amount would be calculated as under the standard plan, and interest would stop accruing after ten years. This transparent process allows borrowers to know their total repayment amount as soon as they walk out the door, giving borrowers a clearer option to work towards repayment.

This income-based repayment plan would:

  • Calculate the borrower’s monthly payment as 15% of discretionary income.
  • Maintain the same total loan repayment amount as the standard repayment plan. 
  • Not include time-based loan forgiveness, but no additional interest would capitalize after 10 years.


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