The Senate on Wednesday accepted an amendment to its fiscal year (FY) 2016 budget bill to simplify the student loan repayment process.
The amendment, from Sen. Richard Burr (R-NC), would allow borrowers to choose between two repayment plans: a fixed 10-year plan (renamed and otherwise unchanged from the current “standard” plan) or a simplified income-driven repayment (SIDR) plan. The amendment is based on the Repay Act of 2015, which was introduced in January by Burr and his colleague, Sen. Angus King (I-ME). During his floor speech to introduce the amendment, Burr said that financial aid administrators are "the people who are on the front lines of helping students prepare for repayment after college and we should listen to them."
Burr also quoted, on the floor, a letter of support for the Repay Act from NASFAA President Justin Draeger in which Draeger wrote:
"Consolidating the various income-contingent repayment plans into a single plan will help borrowers understand the benefits and protections inherent in our federal student loan system while also protecting the federal investment in higher education... Despite the many protections in these repayment plans, such as income-contingent repayment, a frustrating number of student loan borrowers continue to default. This is due in part to the fact that income-contingent repayment options are optional and require borrowers to take proactive and cumbersome steps to enroll. ... The proposal to collapse the different income-related repayment plans into one single income-based repayment plan should help to ease the enrollment process for borrowers."
Publication Date: 3/26/2015