NASFAA Submits Comments on REPAYE Proposed Rules

By Karen McCarthy, NASFAA Policy & Federal Relations Staff

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:

  • Removal of the “10‐year standard payment cap”
  • Treatment of borrowers with a tax filing status of “married filing separately”
  • Removal of the partial financial hardship eligibility requirement
  • Expansion of eligibility to all Direct Loan borrowers regardless of when they borrowed.

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:

  • Support for proposed changes to the cohort default rate participation rate index (PRI) challenge and appeal process and a request that ED implementation of the new process be scheduled for 2016, rather than in 2017, as planned
  • Encouragement for ED to collaborate with other federal agencies on other opportunities to exchange relevant information, where appropriate, in order to streamline Title IV processes
  • Support for treatment of lump sum payments from the Department of Defense loan repayment programs as individual payments for purposes of public service loan forgiveness and a request for similar treatment of lump sum payments from any loan repayment program offered by any federal agency


Publication Date: 8/11/2015

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