Latest news with #Repayment
Time of India
19-07-2025
- Business
- Time of India
460,000 student loan borrowers to be kicked off from repayment plan? Know the big changes from August 1
Student loan borrowers to be denied repayment plan? Live Events Student loan payments to change from August 1 (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel President Donald Trump has dismantled the Department of Education and this is having significant consequences for millions of borrowers and the broader education system. The department which oversaw federal student loan programs, distributed financial aid and enforces policies meant to protect borrowers from predatory lending eliminating the Department of Education (DOE) means uncertainty into loan servicing, possibly delaying repayments, altering forgiveness programs or making it harder for students to access federal aid. The department will reject nearly a half-million applications from people seeking to make lower payments on their student loans , reports Politico citing internal report suggests that the department will reject applications of 460,000 federal student loan borrowers who selected the lowest monthly option for a payment plan based on their income. They make up about 31 percent of a 1.5 million application backlog for borrowers who are seeking Income-Driven Repayment, one of many options typically available for borrowers having difficulty paying back their loans.A spokesperson for the Education Department told Politico that the SAVE Plan — introduced during the Biden administration — offers the lowest monthly payment option, capping payments at 5% of a borrower's discretionary income for undergraduate loans and 10% for graduate loans. However, the plan has been blocked by the courts since June 2024.'Loan servicers cannot process these applications as SAVE is no longer an option, as it is illegal,' a department spokesperson wrote in a statement to August 1, the Trump administration will resume interest charges on the accounts of around 8 million borrowers, who had previously been granted an interest-free forbearance period under the Biden administration's Saving on a Valuable Education (SAVE) Plan, reports Trump administration said bringing back the accrual of interest rate on loans was to "comply with a federal court injunction that has blocked implementation of the SAVE Plan, including the Department's action to put SAVE borrowers in a zero percent interest rate status."The Trump administration has deemed the SAVE plan "illegal," saying it intends to bring back "fiscal responsibility to the federal student loan portfolio." "For years, the Biden Administration used so-called 'loan forgiveness' promises to win votes, but federal courts repeatedly ruled that those actions were unlawful," McMahon said."Congress designed these programs to ensure that borrowers repay their loans, yet the Biden Administration tried to illegally force taxpayers to foot the bill instead," she put it in simple terms, it means the change will see borrowers being charged more than $27 billion in interest over the next 12 months, which will have wide repercussions on the lives of March, Trump signed an executive order calling for the dismantling of the U.S. Education Department, advancing a campaign promise to take apart an agency that's been a longtime target of conservatives. Trump has derided the Education Department as wasteful and polluted by liberal order says the education secretary will, 'to the maximum extent appropriate and permitted by law, take all necessary steps to facilitate the closure of the Department of Education and return authority over education to the States and local communities.'
Wales Online
12-05-2025
- Business
- Wales Online
Millions of DWP claimants will notice sudden payment change from this week
Our community members are treated to special offers, promotions and adverts from us and our partners. You can check out at any time. More info Millions of DWP claimants are to notice a sudden payment change starting from this week. More than 7.5 million people in Britain are now receiving Universal Credit, including 226,000 in Birmingham - the highest number in any local authority area. Around 35 per cent of recipients are working and get a Universal Credit top-up to help with low incomes, high rents or the additional costs of disabled children. The others are either looking for a job or are not required to work on health grounds. The annual uprating of Universal Credit, a 1.7 per cent rise introduced on April 7, 2025, will start being applied to payments this week. The first to see it will be those who are paid on Tuesday, May 13. READ MORE: The delay of more than a month is due to the benefit being paid in arrears. Because it's means-tested, the amounts need to be recalculated every month based on a person's financial circumstances, including income, savings, debts, and other benefits that can be claimed at the same time but may affect their UC entitlement. So the first to see the new amounts will be those whose monthly assessment period ran from the first day of the new rise on April 7 until May 6. They'll then be paid seven days later on May 13. All other claimants will see the rise in their next payment after May 13 and everyone will have had it by the end of June. In the new uprating, the standard allowance of Universal Credit for a single claimant under the age of 25 has gone up from £311.68 to £316.98 a month. For those who are single and aged 25 or over, the standard allowance is increasing from £393.45 to £400.14 Couples who are on a joint claim for Universal Credit will see the standard allowance increasing from £489.23 to £497.55 if they are both under 25. If one or both partners are aged 25 or over, the standard allowance will go up from £617.60 to £628.10 a month. Additional elements paid for a first child (born before April 6, 2017) are increasing from £333.33 to £339 a month. For a first child born on or after that date and a second child, the amount has gone up from £287.92 to £292.81 a month. For disabled children, the lower rate addition has increased from £156.11 to £158.76, while the higher rate addition has risen from £487.58 to £495.87. These changes mean that, on average, around 5.7 million households on Universal Credit can expect to receive an extra £150 over the 2025/2026 financial year. In addition, 1.2 million of the poorest households claiming Universal Credit - including 700,000 with children - could get an extra £420 a year through the new Fair Repayment Rate that came into force on April 30. This has lowered the maximum amount that can be taken off someone's Universal Credit standard allowance to repay debts from 25 per cent to 15 per cent. Claimants will then be due new rises from April 2026 that are independent of inflation. The aim is to "rebalance" Universal Credit so it's less focused on the economically inactive and more geared toward encouraging people to seek employment. The DWP plans to boost the levels of the standard allowance while freezing the incapacity element for those who say they cannot work. The DWP explained: "We will increase the UC standard allowance for new and existing claims. This would mean the single person 25+ rate of UC standard allowance increasing by £7 per week (from £91pw in 2024/2025 to £98pw in 2026/2027). "For people who already receive the UC health element [for having 'limited capability for work and work-related activity' or LCWRA], the rate will be frozen at £97pw until 2029/2030 but this group will receive an increased UC entitlement in cash terms as a result of the increased standard allowance." Get breaking news on BirminghamLive WhatsApp. Join our dedicated community for the latest updates sent straight to your phone as they happen. You can find out more in our Money Saving Newsletter, which is sent out daily via email with all the updates you need to know on pensions, PIP, Universal Credit, benefits, finances, bills, and shopping discounts. Get the top stories in your inbox to browse through at a time that suits you.
Western Telegraph
01-05-2025
- Business
- Western Telegraph
Universal Credit change and £420 boost for 1.2 million homes
The new Fair Repayment Rate caps Universal Credit deductions at 15%, down from 25%. It places a limit on how much people in debt can have taken off their benefits to pay what they owe. What is the Fair Repayment Rate? The Fair Repayment Rate was introduced by the Chancellor at the Autumn Budget, as part of broader efforts to raise living standards, combat poverty, and tackle the cost-of-living crisis. Chancellor of the Exchequer Rachel Reeves said: "As announced at the budget, from today, 1.2 million households will keep more of their Universal Credit and will be on average £420 better off a year. This is our plan for change delivering, easing the cost of living and putting more money into the pockets of working people. "With as many as 2.8 million households seeing deductions made to their Universal Credit award to pay off debt each month, the new rate is designed to ensure money is repaid where it is owed, and people can still cover their day-to-day needs." Recommended reading: How does it work in a Universal Credit assessment period? The maximum amount that can be taken from someone's Universal Credit standard allowance payment to repay debt has been 25% – but from today this is reduced to 15%. This will mean an average £420 extra a year for 1.2 million of the poorest households, including 700,000 households with children, while helping people to pay down their debts in a sustainable way. The change will be applied to all assessment periods that start on or after 30 April.
South Wales Argus
30-04-2025
- Business
- South Wales Argus
Universal Credit change and £420 boost for 1.2 million homes
The new Fair Repayment Rate caps Universal Credit deductions at 15%, down from 25%. It places a limit on how much people in debt can have taken off their benefits to pay what they owe. What is the Fair Repayment Rate? The Fair Repayment Rate was introduced by the Chancellor at the Autumn Budget, as part of broader efforts to raise living standards, combat poverty, and tackle the cost-of-living crisis. Chancellor of the Exchequer Rachel Reeves said: "As announced at the budget, from today, 1.2 million households will keep more of their Universal Credit and will be on average £420 better off a year. This is our plan for change delivering, easing the cost of living and putting more money into the pockets of working people. "With as many as 2.8 million households seeing deductions made to their Universal Credit award to pay off debt each month, the new rate is designed to ensure money is repaid where it is owed, and people can still cover their day-to-day needs." Recommended reading: How does it work in a Universal Credit assessment period? The maximum amount that can be taken from someone's Universal Credit standard allowance payment to repay debt has been 25% – but from today this is reduced to 15%. This will mean an average £420 extra a year for 1.2 million of the poorest households, including 700,000 households with children, while helping people to pay down their debts in a sustainable way. The change will be applied to all assessment periods that start on or after 30 April.
Glasgow Times
30-04-2025
- Business
- Glasgow Times
Universal Credit change and £420 boost for 1.2 million homes
The new Fair Repayment Rate caps Universal Credit deductions at 15%, down from 25%. It places a limit on how much people in debt can have taken off their benefits to pay what they owe. What is the Fair Repayment Rate? The Fair Repayment Rate was introduced by the Chancellor at the Autumn Budget, as part of broader efforts to raise living standards, combat poverty, and tackle the cost-of-living crisis. Chancellor of the Exchequer Rachel Reeves said: "As announced at the budget, from today, 1.2 million households will keep more of their Universal Credit and will be on average £420 better off a year. This is our plan for change delivering, easing the cost of living and putting more money into the pockets of working people. "With as many as 2.8 million households seeing deductions made to their Universal Credit award to pay off debt each month, the new rate is designed to ensure money is repaid where it is owed, and people can still cover their day-to-day needs." Recommended reading: How does it work in a Universal Credit assessment period? The maximum amount that can be taken from someone's Universal Credit standard allowance payment to repay debt has been 25% – but from today this is reduced to 15%. This will mean an average £420 extra a year for 1.2 million of the poorest households, including 700,000 households with children, while helping people to pay down their debts in a sustainable way. The change will be applied to all assessment periods that start on or after 30 April.
