Education Department Opens Rulemaking on PSLF and Repayment Plans

Overview

• The Department of Education has initiated a new rulemaking process concerning key federal student loan programs, including Public Service Loan Forgiveness (PSLF), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR).
• This is in response to changes in legal and policy circumstances, including court rulings and executive orders.
• Public comments will be solicited, with public hearings scheduled.

Key Points

• Public Comment and Hearings:
  • The Department will accept public comments through the Federal eRulemaking Portal.
  • Two public hearings are planned:
    1. In-person on April 29.
    2. Virtual session on May 1.
  • Anyone can register to speak at these hearings.
• Rulemaking Requirements:
  • The process must comply with the Higher Education Act of 1965.
  • Proposed regulations cannot be retroactive or violate federal law.
• Focus Areas:
  • Revisiting definitions of qualifying employer under PSLF.
  • Assessing PAYE and ICR plan efficiencies and potential updates.

Why This Matters

• Legal and Policy Context:
  • The process aims to align regulations with statutory requirements and operational realities.
  • Potentially redefining employer qualifications under PSLF.
  • Reevaluation of PAYE and ICR plans due to court rulings and executive orders.

Legislative Constraints

• Limits of Rulemaking:
  • The Department cannot change the law; regulations must fit within existing statutory frameworks.
  • Changes cannot affect existing repayment terms for current borrowers.
  • Congress has the power to override any new regulations within 60 days of implementation.

Next Steps

• Public Participation:
  • Stakeholders are encouraged to participate in hearings and submit written comments.
  • Negotiated rulemaking committees will be formed post-comment period.
  • Final rule adoption will include a second round of public input.
  • Changes will not take effect until at least July 2026.

Additional Information

• The article provides links for further reading and resources, including:
  • The full rulemaking outline (PDF).
  • Details on how to participate in the process via Regulations.gov.

Author Information

• Robert Farrington:
  • Known as "America's Millennial Money Expert" and "Student Loan Debt Expert."
  • Provides guidance on investing, student loans, and personal finance through The College Investor platform.

This summary captures the essential information related to the Department of Education's new rulemaking process for PSLF, PAYE, and ICR, its context, implications, and the process for public participation.