Consensus Reached in the Fourth Round of Negotiated Rulemaking

Agreement was reached on April 14 by the federal and nonfederal negotiators on outstanding issues regarding the negotiated rulemaking loan package. As discussed in the March OLN article, an additional session was held after the third negotiated rulemaking session concluded. Highlighted below are several provisions on which negotiators reached consensus.

Income-Based Repayment (IBR)

• Allows payments made in the income contingent repayment plan prior to July 1, 2009 to count toward the 25 years of repayment required for forgiveness
• Changes the calculation of special allowance payments on loans in IBR, allowing for an exception for unpaid accrued interest

Direct Loan Public Service Loan Forgiveness

• New definition includes individuals working for "public service organizations"
• New provision to include borrowers who are employed by an organization that is subsidized through a government contract
• Defines full-time work in one or more jobs where the borrower works an annual average of 30 hours per week for a contractual or employment period of at least nine months

Definition of Not-For-Profit Loan Holder

• New provision would require not-for-profit lenders to submit their annual IRS Form 990s to the Department of Education as part of their annual certification process

Wondering what to expect next? The Notice of Proposed Rulemaking (NPRM) should be released in the Federal Register in May or June with a 60-day public comment period. The final regulations should be published in the Federal Register by November 1 with an effective date of July 1, 2009.

If you have questions or need more information, contact OGSLP's Policy, Compliance and Training department at 405.234.4432 or by email at pct@ogslp.org.