Student Loan Repayment in the College Cost Reduction Act: Assessing How Benefits Change for Different Borrower Groups

Earlier this year, Representative Virginia Foxx (R-NC) introduced the College Cost Reduction Act (CCRA), a bill to reform higher education grant and loan programs and to establish new accountability rules for colleges. A key part of the bill would replace the myriad income-driven repayment (IDR) plans for federal student loans, including the Biden administration's Saving on a Valuable Education (SAVE) plan, with a new repayment plan. The bill features income-based payments, a cap on total payments, and monthly subsidies that waive unpaid interest and reduce principal balances for certain borrowers. In this brief, the authors compare the CCRA plan with the Biden administration's SAVE plan, the most generous IDR plan. The authors also compare the CCRA plan with another version of IDR, the Pay as You Earn (PAYE) plan.