Expected Implementation Timeline For Presidential Memorandum On Student Loans
By Jesse O’Connell, Policy and Federal Relations Staff
Yesterday we covered President Obama’s executive actions related to student borrowing, the highlight of which is the planned extension of the Pay As You Earn (PAYE) repayment option to approximately 5 million additional borrowers. While nothing is set to happen immediately, is important to understand the expected timeline for these changes to take place. Contained within the memorandum were a series of dates and deadlines, which we’ve outlined below.
- By September 30, 2014 (Dept. of Education and Dept. of Treasury):
- Convene higher education experts and student-debt researchers to identify ways to evaluate and strengthen loan counseling for Federal student loan borrowers;
- Develop a pilot project to test the effectiveness of loan counseling resources, including the Department of Education's Financial Awareness Counseling Tool;
- Initiate partnerships with private-sector entities to better educate borrowers about income-based repayment plans during the tax filing season in 2015.
- By December 31, 2014 (Dept. of Education):
- Develop, evaluate, and implement new targeted strategies to reach borrowers who may be struggling to repay their Federal student loans to ensure that they have the information they need to select the best repayment option and avoid future default.
- By June 9, 2015 (Dept. of Education):
- Propose regulations that will allow for the expansion of PAYE, and issue final regulations in a timely fashion after considering all public comments, as appropriate, with the goal of making the repayment option available to borrowers by the end of 2015.
- December 31, 2015:
- The PAYE repayment option should be made available to the expanded pool of borrowers.
NASFAA will continue to monitor the development and implementation of this initiative and will share additional details as they’re made available.
Publication Date: 6/11/2014