Low-Income Borrowers Could Be Left in Repayment Until Death, and Parent PLUS Borrowers Would Be Left Without Affordable Payment Options
WASHINGTON – Two new fact sheets from the National Consumer Law Center (NCLC) explain how recent proposals to alter federal student loan repayment options ignore the struggles of low-income parents who borrow alongside their children to cover the cost of college, and break the promise that low-income student loan borrowers can become debt-free by making 20 to 25 years of payments under income-driven repayment (IDR) plans. These proposals are currently being considered by Congress as part of the budget reconciliation process.
Left Out to Dry: Proposals to Streamline Student Loan Repayment Eliminate Affordable Pathways for Parent Borrowers looks at how the College Cost Reduction Act (H.R. 6951), and the Strengthening Accountability and Value in Education for Student Act (S.1971) ignore Parent PLUS borrowers who have taken out loans to help their children combat the rising cost of college and insufficient financial aid. Both proposals would leave low-income parent borrowers without access to affordable repayment options, threatening their financial security and increasing their risk of default.
Repay or Die Trying: Proposal to Eliminate Income-Driven Repayment (IDR) Plans Threatens to Swell Ranks of Older Adults Struggling with Student Debt examines the impact on older adults of a proposal to replace IDR plans with a new plan that eliminates the promise that borrowers can become debt-free by making 20 or 25 years of payments. Extinguishing this light at the end of the tunnel would mean low-income borrowers could be stuck paying their student loans for the rest of their lives, and threatens to exacerbate the fast-growing problem of people struggling with student debt into old age.
“Breaking the promise that all borrowers can become debt-free by making income-based payments for a set number of years would increase the number of older adults still struggling with loans taken out decades ago for school or job training and leave low-income older adults living on Social Security Disability and Retirement benefits with no way out of their student debt burden. It would also increase their likelihood of default, worsening the default crisis among older adults and putting them at risk of having their Social Security benefits seized,” said Alpha Taylor, staff attorney at the National Consumer Law Center. “Under this proposal, many of these borrowers would struggle for decades and die trying to pay off their student loan debt.”
Related Resources
- Student Loan Borrower Assistance Project
- Press release: Congress Must Preserve Protections for Student Loan Borrowers Whose Schools Closed or Defrauded Them, April 3, 2025
- Press release: Shutting Down the Department of Education Threatens Students and Working Families Who Rely on Federal Student Aid, March 20, 2025
- Issue Brief: The Growing Impact of Student Loan Debt on Older Adults, September 19, 2024
- Student Loan Toolkit, May 20, 2024
- Delivering Distress to Borrowers in Default, Oct. 11, 2023
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