The regulatory addition of a new income‐driven repayment plan, which will co‐exist alongside four other income‐driven plans, is a step in the opposite direction of the momentum in the entire higher education community, NASFAA declared in its comments submitted yesterday on the General Eligibility and FFEL/DL Notice of Proposed Rulemaking (NPRM).
In addition to general objections to the creation of the Revised Pay As You Earn (REPAYE) repayment plan, NASFAA’s comments point out the power imbalance created by the Department of Education’s (ED) refusal to share details on the budget constraints applicable to the REPAYE plan.
While expressing fundamental concern over the development of yet another repayment plan, the comments support several of the proposed provisions of REPAYE that better help struggling borrowers, while improving fairness and targeting of benefits, including:
NASFAA’s comments urge ED to reconsider the proposed tiered loan forgiveness under REPAYE, under which a borrower with only undergraduate loans repays for 20 years before forgiveness and a borrower with any graduate loans repays for 25 years before forgiveness. Tiered forgiveness is too complicated, sometimes arbitrary and seemingly unfair, and hard to explain to borrowers – an unfortunate outcome for a time in which many stakeholders are working hard to simplify the system for students.
The comments also address other topics in the NPRM, including:
Publication Date: 8/11/2015