Approximately 5 million more borrowers will have access to Pay As You Earn (PAYE) by 2015, after the Department of Education (ED) promulgates new PAYE regulations, as directed by a Presidential Memorandum from President Obama. That won’t be sufficient, a new petition from a vocal campaign argues.
All student loan borrowers should be eligible for PAYE, according to Higher Ed Not Debt, a campaign with 26 organizational partners including the National Education Association and the Education Trust. To generate support, Higher Ed Not Debt created an online petition for universal PAYE.
“The Department of Education has the chance to help millions of people with their student loans. We can make sure they do it right,” the petition claims.
PAYE caps monthly payments to 10 percent of a borrower’s discretionary income, and forgives debt after 20 years of on-time payments. The plan is only available to fairly new borrowers with some demonstrated financial hardship.
In his 2015 budget proposal, President Obama also proposed universal PAYE. Unlike the Presidential Memorandum, the Presidential Budget Request is simply a proposal and will not be enacted without Congressional approval."
In his proposal, President Obama suggested capping loan forgiveness under the Public Service Loan Forgiveness (PSLF) program at $57,500. Eligible PAYE participants can currently enroll in PSLF, too – and Higher Ed Not Debt’s petition argues that all debt should be forgiven, without caps, after 10 years of public service work or 20 in the private sector.
Pursuant to the Presidential Memorandum, ED has announced the establishment of a negotiated rulemaking committee to develop proposed rules governing the expansion of PAYE eligibility, with the goal of making the repayment option available to borrowers by December 31, 2015.
Publication Date: 10/24/2014