The Biden administration and the U.S. Department of Education are proposing amended regulations to the Revised Pay As You Earn (REPAYE) initiative which was made available to student borrowers in 2016.
The administration said in a statement made public on Tuesday that "higher education should be a ticket to the middle class, not saddle individuals with student debt that becomes a lifelong financial burden."
The administration wants to try and find ways to offer some relief to student loan borrowers to promote the ability to become homeowners, start businesses and save for retirement.
The Department of Education (DOE) says that under a revised and updated REPAYE plan, it hopes future borrowers would "see lifetime payments per dollar borrowed fall by 40 percent."
DOE says "on average," Hispanic, Black, American Indian and Alaska Natives could expect to see their lifetime payments "per dollar" reduced by 50%.
For borrowers in the bottom 30% of earners, DOE says it hopes the updates to the REPAYE plan would have those borrowers see lifetime payments per dollar borrowed reduced by 83% on average.
And DOE says that under the updated plan student borrowers with an income below $30,500 annually would not be responsible for making monthly payments on their loans.
The Biden administration released an announcement saying that it will hold colleges and universities more accountable for creating more value for students and making education more affordable.
The administration proposed several goals under this topic, including requiring educational institutions to warn students, before receiving federal aid, if they are attending a "low-financial-value" program. The Biden administration's announcement said that it recognizes that some educational programs leave students with too much debt compared to their expected earnings in the job market.
Institutions, under the new rules, would be required to submit to additional conditions if the educational institution is "exhibiting signs of distress or concerning behavior."
The updated PAYE conditions would also stop colleges and universities from forcing students to sign forced arbitration agreements and class action waivers that "insulate bad actors from accountability" in the U.S. justice system.
