Take Action to Help Improve Income-Based Repayment!

Income-Based Repayment (IBR) has helped hundreds of thousands of federal student loan borrowers lower their payments and stay on track to repay their loans. But, it doesn't always work as well as it should. In these tough economic times, with borrowers at all stages of life struggling to make ends meet, strengthening IBR is more critical than ever.

The U.S. Department of Education is seeking feedback on proposed rules to make IBR and related repayment plans - like the proposed Pay as You Earn plan -- more accessible and easier to use. These rules would also simplify the process for discharging loans for borrowers who become totally and permanently disabled. Many of the proposed rules are real improvements, but others don't go far enough.

Now it's your chance to weigh in - use your voice to help make it easier for borrowers to manage their federal student loans. But, you only have until Thursday, August 16thClick here to submit a comment.

At TICAS and our Project on Student Debt, we've been working closely with student and consumer advocates to keep borrowers' needs front and center throughout this regulatory process. Here's more information about the changes we're calling for:

1. Reduce the extreme and disproportionate penalty for late paperwork.
Under the proposed rules, if borrowers are more than ten days late submitting annual income information - just paperwork, NOT a loan payment - all unpaid accrued interest is added to their loan balance. This is too harsh.

2. Count qualifying payments made before and after consolidation towards forgiveness. Under IBR, loans are forgiven after 25 years of qualifying payments (or 20 years in some related plans). But, if a borrower consolidates multiple loans into one loan, qualifying payments made before the loans were combined suddenly don't count anymore. Borrowers should get credit for all qualifying payments.

3. Ensure borrowers can exit IBR to enter a different repayment plan without prohibitive penalty. Right now, borrowers who want to leave IBR for a different repayment plan can be charged a massive "exit fee." Proposed rules would allow that fee to be reduced through forbearance, but it is left up to the lender.  There need to be clear guidelines to ensure borrowers can always exit IBR.

4. Accept Social Security Administration (SSA) disability determinations for loan discharges. Using existing disability guidelines would streamline the process - preventing borrowers from going through the entire application process twice.

Public comments must be submitted by Thursday, August 16 through the government's official site! Please take a moment to submit a comment and make sure borrowers' voices are heard. It's easy, just follow the instructions below:

Instructions



Suggested Message

As a student loan borrower, I support the Department's efforts to make Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR) more accessible and helpful to borrowers, and to simplify the process of discharging loans in cases of total and permanent disability (TPD). I also applaud the proposed regulations implementing the "Pay As You Earn" repayment plan, which is expected to help more than 1.6 million recent borrowers qualify for lower monthly payments and earlier loan forgiveness than IBR currently provides.

However, the proposed rules must go further to ensure that these programs work better for borrowers. I urge you to make the following changes:

1. Reduce the extreme and disproportionate penalty for late paperwork.

2. Count qualifying payments made before and after consolidation towards forgiveness.

3. Ensure borrowers can exit IBR to enter a different repayment plan without prohibitive penalty.

4. Accept Social Security Administration (SSA) disability determinations for loan discharges.

Sincerely, 

Income-Based Repayment and Pay As You Earn are two ways to help keep monthly payments affordable based on your income and family size. Visit the Department of Education’s Repayment Estimator to find out what your payments might be.
 

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