WASHINGTON (NEWS RELEASE) – On Thurssday, U.S. Senator Joe Manchin (D-WV) reintroduced legislation to reform federal student loan repayment programs. The Repay Act, originally introduced in 2014, would simplify the complex maze of federal student loan repayment programs by consolidating many of the benefits of current repayment programs into two plans: a fixed repayment plan, based on a 10-year period, and a single, simplified income-driven repayment option.
“Higher education is the key to opportunity and the best way to keep the United States competitive in the global marketplace. It also helps us keep the best and brightest right here in West Virginia. But, burdening our students with trillions in student loan debt only hinders our progress as a nation and our growth as a state,” Senator Manchin said. “I’m glad to join my colleagues on this bipartisan legislation that will simplify loan repayments for students and families so they can focus on getting the best education they can and being a productive member of society.”
Current graduates face a maze of federal student loan repayment programs from which to choose that often leave students confused about which program best fits their needs. In addition, due to years of changing eligibility terms and the introduction of new programs, little has been done to ensure that taxpayer dollars are not wasted subsidizing borrowers who do not need additional assistance.
The Repay Act addresses those issues to make loan repayment more affordable for the middle class by eliminating duplicative repayment options, streamlining eligibility terms, and ensuring that borrowers will never direct more than 15 percent of their discretionary income to their loan payments. The proposal also ends the disproportionate federal subsidization of loan payments for high income borrowers and sets parameters for the amount of debt that can be forgiven over certain periods of time.
This legislation is estimated to save taxpayers hundreds of millions of dollars over the next decade.
The bill has bipartisan support. Other cosponsors include Senators Angus King ((I-ME), Richard Burr (R-NC), Rob Portman (R-OH), Mark Warner (D-VA), Roger Wicker (R-MS), Susan Collins (R-ME), and Jeanne Shaheen (D-NH).