The U.S. Treasury Department and the U.S. Department of Education announced that they will continue working with tax preparers during the 2015 tax filing season to increase federal student loan borrowers' awareness of income-driven repayment plans. This year H&R Block and Intuit, Inc., are using their online tax preparation tools to share information about repayment options, including the President's Pay As You Earn (PAYE) plan and the Department of Education's Repayment Estimator with student loan borrowers.
Income-driven repayment plans allow eligible borrowers to lower their monthly federal student loan payments to as low as 10 percent of the borrower's discretionary income. The Repayment Estimator enables borrowers to compare estimates of their monthly student loan payments, projected loan forgiveness where applicable, length of repayment, total interest and total amount paid under all federal student loan repayment plans.
"Student loans help millions of Americans invest in themselves and contribute to the potential of our country," said Sarah Bloom Raskin, deputy secretary of the Treasury Department, in a press release. "For students to make the best use of this investment requires arming them with information about flexible repayment options."
In 2010, President Obama signed into law an income-driven repayment plan for federal borrowers that would lower the cap of a borrower's monthly payment to 10 percent of discretionary income for borrowers who first take out loans after July 1, 2014. In October 2011, the President took executive action to make the lower monthly payment amount available to eligible borrowers in 2012, rather than 2014. This action made student loans more affordable for more borrowers by reducing their monthly student loan payments.
"A postsecondary education is the single most important investment that Americans can make in their futures," said Education Under Secretary Ted Mitchell. "Through these partnerships, we will continue to help empower borrowers with the tools they need to make informed decisions at every step of the process, from selecting a postsecondary institution to managing their student loan debt and staying on track to repayment."
