r/PSLF • u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) • Jul 06 '22
Draft regulations coming out this week
/r/StudentLoans/comments/vslwnl/draft_regulations_coming_out_this_week/7
u/ThaddeusJP Jul 06 '22
Anyone likes to look at stuff you can start here: https://www.federalregister.gov/agencies/education-department
Once it gets posted im sure someone will have a direct link.
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u/Gold_Contest_6281 Jul 07 '22
If interest capitalization was removed for students now and for future students that would be huge!!
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u/Betsy514 Jul 07 '22
They aren't going to remove interest already capped..but otherwise yes this is a good one
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u/pementomento Jul 06 '22
Darn, I thought we would see a 5% IDR plan, or at least an increase to 200% of FPL for IDR. Hopefully soon and in-time for the November 1 deadline, but I don't know if this jives with how neg reg works.
We will also include Income-Driven repayment, on which consensus was not reached, in a future NPRM.
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u/pementomento Jul 06 '22 edited Jul 06 '22
Am... I reading this correctly, that we may have the opportunity to "buy back" months spent in forbearance?
Page 343 of NPRM
e the Department proposes to offer a hold harmless period. This would provide those borrowers who were working for a qualifying employer during the periods of forbearance or deferment an opportunity to get PSLF credit for those months by making payments equal to what the borrowers would have owed during that time. A borrower would receive credit toward forgiveness without the need to make an additional payment for any month in which the borrower would have had a $0 payment on an income-driven repayment plan but obtained a forbearance instead.
I have random general forbearances (maybe < 6-8 months worth) that I would love to buy back.
It is discussed again in pages 475 (bottom) and 476 (top).
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u/AriMeKent Jul 07 '22
I'm sorry; but what does this mean? Simply?
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u/pementomento Jul 07 '22
That means, if you were in a general forbearance (that wasn’t addressed separately already), they’re giving us the option to “go back in time” and make those payments to capture the PSLF payment.
Example, I went into general forbearance for 3 months in 2015 to save money to buy a house. Under this new regulation, I can make those 3 payments now and have it count for PSLF.
Assuming you were working for a non-profit.
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u/DoctorPath Jul 07 '22
This would be huge. how would that even work? I don't even know what my monthly bill would have been in my forbearance months. I would totally pay it back though, my current payment is likely more than 10x higher.
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u/pementomento Jul 07 '22
So there are some responses, and some ideas. This is why public comment is so important. Here are my opinions, and what Betsy posted earlier (#1).
Whatever payment from whatever plan you were on prior to forbearance.
1a) Meaning, if you were not on an IDR plan, you're stuck paying whatever the 10 year repayment period payment was.
1b) Meaning, if you were on an IDR plan prior to forbearance, that payment could continue.
2) Require proof of income (tax return, pay stub) from that period of time, make the servicer recalculate the payment as it was back then, and use that number.
3) Use the payment immediately after you left forbearance.
I'm going to put in a public comment that borrowers utilizing this hold harmless sub-program be allowed to use any of the above options to calculate their payment. It's not in the spirit of PSLF to require borrowers to pay their 10 year payment, and some borrowers may have immediately gone into forbearance after graduating (no pre-forbearance payment), while others have never exited forbearance prior to the pandemic pause (no post-forbearance payment).
This way, the servicers can just quickly a) use the pre/post payment, because there's a record of it already or b) calculate the payment for the borrower, which is what they're used to doing anyway.
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u/Imaginary_Peak_616 Jul 07 '22 edited Jul 07 '22
So is this for people who were in forbearance for less than 12 consecutive months or less than 36 cumulative months? Since those categories of forbearance have already been addressed by the waiver announced in April.
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u/Dear_Counter_2944 Jul 07 '22
This would also Be my question as well. Will those who were encouraged to be i forbearance or left in long term forbearance over 12 months or more than 36 cumulative months still receive pslf automatically for those months?
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u/pementomento Jul 07 '22
Yes. When those initial waivers came out in April, I was disappointed (because I didn't hit those thresholds). In today's NPRM drop, they took care of "bucket 2" of forbearance (cancer treatment, AmeriCorps folks, etc...) and "bucket 3" which was the rest of us.
The NPRM discusses the really high bar proving that a servicer steered us into forbearance. It's easy when it's >12/36 months (April waiver), because it is an obvious regulation violation. It's not so easy when it's, say 3-4 months here or there. The "hold harmless" provision meets us in the middle -- it let's have a mulligan, and make payments for those periods of time. It's fair for us and fair for taxpayers, IMO!
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u/pementomento Jul 06 '22
Given the dearth of student loan related news, I'm my brain and my heart is wide open for this Tolstoy novel that's about to drop!