Pam’s Link Alert: Proposed Regulations for the “Pay As You Earn” Repayment Initiative Released as Part of NPRM Package on July 17
The Department of Education published a new Notice of Proposed Rulemaking (NPRM) on July 17, 2012. The NPRM is available at http://federalregister.gov/a/2012-15888. The financial aid community will have 30 days to review and make comments (due by August 16, 2012) and final regulations are expected to be published on or before November 1, 2012, with an effective date of July 1, 2013. A second NPRM addressing other topics is expected to be published later this summer (although those final regulations will not likely take effect until July 1, 2014).
The proposed regulations will outline implementation of the President’s “Pay As You Earn” repayment initiative as well as other loan-related regulations. Please see the following summary for this NPRM.
“The Secretary proposes to amend the Federal Perkins Loan (Perkins Loan) program, Federal Family Education Loan (FFEL) program, and William D. Ford Federal Direct Loan (Direct Loan) program regulations. The proposed regulations would implement a new Income Contingent Repayment (ICR) plan in the Direct Loan program based on the President’s “Pay As You Earn” repayment initiative, incorporate recent statutory changes to the Income Based Repayment (IBR) plan in the Direct Loan and FFEL programs, and streamline and add clarity to the total and permanent disability discharge process for borrowers in the title IV, HEA loan programs. The proposed regulations implementing a new ICR Plan and the statutory changes to the IBR plan would assist borrowers in repaying their loans while the proposed changes to the to the total and permanent disability discharge process would reduce burden for borrowers who are disabled and seeking a discharge of their title IV debt.”