OCAP Legislative Update

Administration Issues Directives to Support Income-Based Repayment

In early 2010, Congress approved the Income-Based Repayment (IBR) plan, whereby an individualís federal student loan payments could be capped at 15 percent of discretionary income, with any remaining balance forgiven after making payments for 25 years. Subsequently, Congress enacted legislation to reduce IBR terms to 10 percent of discretionary income, with balance forgiveness after 20 years of payments, for new borrowers on or after July 1, 2014. In October 2011, President Obama issued the ďPay as You EarnĒ proposal, which, if approved, may make the reduced IBR terms available to borrowers by the end of 2012.

Because participation in IBR has been relatively low, on June 7, 2012 President Obama issued a memorandum to the Secretary of Education and the Secretary of the Treasury directing that the following specific actions be taken to ease the application process and improve participation:

For more information about IBR, visit EDís IBR Web page. Detailed information, including a list of helpful FAQs, is also available on OCAPís IBR Web page.

Mary Heid
Director for Policy, Compliance & Training
OCAP Communications
P.O. Box 3000
Oklahoma City, OK 73101-3000