REPAYE Negotiators To Meet Thursday For Final Chance At Consensus

By Katy Hopkins, Communications Staff, and Karen McCarthy, Policy & Federal Relations 

With one day of negotiated rulemaking remaining, federal negotiators broke Wednesday to redraft portions of REPAYE, a major component of the overall package.

In the face of loud objections from nonfederal negotiatiors to the creation of a new repayment plan, the Department of Education (ED) is pressing forward with its plan. While some said they were deeply disappointed that their objections and calls for simplicity did not sway ED, nonfederal negotiators have now shifted their focus toward improving the design of REPAYE so that it best serves students while considering current budget constraints.

Nonfederal negotiators said they still have concerns about several parts of the repayment program as drafted, including the structure of tiered loan forgiveness. Under the proposal from the Department of Education (ED), borrowers’ debt would be forgiven after 20 years if they owed $57,500 or less when they first enrolled in REPAYE, and after 25 years if they owed more than $57,500. The program would have to operate within the constraints of the president’s budget, and forgiving all borrowers’ debt after 20 years would be prohibitively expensive, ED negotiator Gail McLarnon said. 

Throughout the negotiated rulemaking process, nonfederal negotiators have opposed the tiers as drafted, citing cliff effects, among other issues. After a private caucus, those negotiators proposed ED instead tier the forgiveness by level of higher education: after 20 years for undergraduate debt, and after 25 years for debt from graduate school. Federal negotiators said they would work with budget office officials to see if such a change is feasible, with the goal of having information for Thursday’s final meeting. 

Federal negotiators also considered and ultimately approved a suggestion from the nonfederal negotiators to allow married borrowers filing separately when they apply to REPAYE to self-certify that they are “separated or unable to reasonably access their spouse’s income”  -- or similar text to that effect. This would provide victims of domestic violence a reprieve if they don’t have access to a spouse’s income -- an issue strongly advocated for during the rulemaking process by several negotiators and members of the public. For all other married borrowers filing separate tax returns, the monthly payment amount under REPAYE would be calculated based on both tax filers’ income.

Negotiators have reached tentative agreement on all other components of the package, including: 

  • Participation Rate Index appeals;
  • Use of the Department of Defense’s Manpower Data Center for servicemembers who qualify for benefits under the Servicemembers Civil Relief Act (SCRA);
  • Applying lump sum payments from the Department of Defense to qualify as separate payments for Public Service Loan Forgiveness, as payments from AmeriCorps and the Peace Corps are counted; 
  • A transition period for borrowers whose defaulted loans have been rehabilitated; and
  • Two technical changes to the draft text.

Today, negotiators will attempt to reach consensus on the entire package of draft proposed rules. Defined as “lack of dissent,” consensus binds ED to publish the agreed-upon language as proposed rules in the Notice of Proposed Rulemaking (NPRM). If consensus is not reached, ED is free to write and publish proposed rules as it sees fit.

Check back in with Today’s News Friday to see if negotiators reach consensus on the package.


Publication Date: 4/30/2015

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