The U.S. Education Department published proposed rules in the Federal Register today that would expand and remake the Obama administration's Pay as You Earn (PAYE) income-based repayment program. The draft regulations would allow many existing federal student loan borrowers to lower their monthly payments and qualify for loan forgiveness sooner.
In April, federal negotiators reached consensus on plans that would extend the PAYE plan to older borrowers, as well as other issues governed by the rules. The proposal would also broaden the circumstances under which colleges can, based on their participation rate index, challenge or appeal cohort default rate sanctions; make it easier for active-duty servicemembers to get reduced interest rates under the Servicemembers Civil Relief Act, through use of a U.S. Department of Defense database and alternative evidence of service; and increase assistance and communication to borrowers who rehabilitate a defaulted loan and transition to repayment, Politico reported
According to the department, the Revised Pay as You Earn (REPAYE) plan would reach another 6 million borrowers – up from President Obama's initial estimate of 5 million – with 2 million expected to enroll. The new initiative would cost $15.3 billion over loan cohorts from 1994-2025.
Public comments on the proposed rules are due on August 10, 2015.
Related Links
Federal Register
http://www.gpo.gov/fdsys/pkg/FR-2015-07-09/pdf/2015-16623.pdf
Politico
http://www.politico.com/morningeducation/0715/morningeducation19061.html