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ED Student Loan Rulemaking Finishes with Consensus

April 6, 2012—The Department of Education (ED) Negotiated Rulemaking on student loan issues March 30 completed its last of three negotiating sessions, reaching consensus on all 25 sets of proposed changes [see Washington Highlights, Jan. 20]. The consensus requires ED to promulgate final rules as agreed upon by the negotiators. 

Of particular importance to medical schools, the new regulations:

  • Implement President Obama’s “Pay As You Earn” proposal as a new ICR-A (Income Contingent Repayment) program [see Washington Highlights, Oct. 28, 2011] and expand eligibility to all new borrowers;

  • Reduce Income‐Based Repayment (IBR) from 15 percent to 10 percent of discretionary income, effective July 2014;

  • Allow a borrower who chooses to leave IBR to make a reduced first payment under forbearance after being placed in an expedited Standard repayment plan;

  • Use the same calculation of adjusted gross income (AGI) for married borrowers filing joint tax returns under IBR as previously under ICR; and

  • Require servicers to notify a borrower 60 days prior to the annual IBR documentation requirements (of due dates and acceptable documents), but allow servicers to request other documentation for AGI as needed.

The department announced it will publish the final rules in two packages.  The final rules regarding IBR, ICR, and Total and Permanent Disability will be published in the Federal Register by Nov. 1, 2012, and effective July 2013. The remaining provisions are expected to be published no later than Jan. 13, 2013, and effective July 2014.  Because the second set of regulations comprises more than 400 pages, it will require additional time for publication, resulting in the delay.  The latter provisions largely address the transition of FFEL regulations to Direct Stafford regulations.

Elaine Papas-Varas, director of student financial aid, University of Medicine and Dentistry of New Jersey (UMDNJ), served on the negotiating committee’s Student Loans Team as a joint AAMC, American Association of Colleges of Osteopathic Medicine (AACOM), and American Dental Education Association nominee.


Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806