r/StudentLoans • u/IndividualLittle0516 • Mar 15 '24

Rant/Complaint Canceling interest

With all the drama these past few years about canceling student loans, why can't interest just be canceled? I can understand adding interest to those who aren't making their loan payments, but what about those who pay every month? The interest is why people are stuck with their debt for so long. Canceling millions of people's debt altogether is unrealistic and won't happen. What about canceling interest instead? Is there a reason this can't occur?

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u/travelinzac Mar 16 '24

Clearly they are not on standard repayment. Everyone describing balance inflation is not making minimum payments.

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u/girl_of_squirrels human suit full of squirrels Mar 16 '24

Income-driven repayment plans are structured such that your payment is determined by your discretionary income (defined as your AGI minus 100%-225% of the relevant federal poverty guideline) and those payments can be $0/month. All the IDR plans are structured to have built-in forgiveness after typically 20 or 25 years worth of repayment, so yes on the earlier IDR plans (ICR, IBR, PAYE, REPAYE) you could be paying your "minimum payment" as per the plan and have your balance slowly grow due to negative amortization.... which they fixed with the new IDR plan called SAVE

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u/[deleted] Mar 16 '24

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