Negotiated Rulemaking Group Reaches Consensus on Student Loan Issues

During the recently completed fourth negotiating session, student loan regulation negotiators reached consensus on the package of regulations affecting the Federal Family Education Loan Program, Federal Perkins Loan Program and Federal Direct Loan Program. The proposed regulations will address provisions of the College Cost Reduction and Access Act and the Higher Education Relief Opportunities for Students, or HEROES, Act.

As a result, the U.S. Department of Education will publish in the Federal Register the Notice of Proposed Rulemaking language agreed upon during the negotiations. The following are among the topics on which the group reached consensus:

• Income-Based Repayment — Allows eligible borrowers to limit their student loan payments to a percentage of their discretionary income, and authorizes the remaining balance to be forgiven after 25 years of payments and, as appropriate, deferments.
• Public Service Loan Forgiveness — Authorizes eligible FDLP borrowers to obtain loan forgiveness based on their employment in various types of public service occupations.
• HEROES Act — Expands the availability of deferments for members of the military meeting certain eligibility criteria, and makes permanent the Department’s authorization to waive various regulatory requirements for military personnel.
• Nonprofit Lender Definition — Clarifies the definition of a nonprofit FFELP lender with respect to ownership, corporate governance, loan servicing fees, and premiums on loans being sold.

After the Notice of Proposed Rulemaking’s publication in the Federal Register, the Department will take comments on the proposed regulations for 60 days. The Department then is to issue final regulations on these student loan issues by
Nov. 1.