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September 22, 2014

Expanding Pay As You Earn by Negotiated Rulemaking

The Department of Education has announced its intention to convene a negotiated rulemaking committee to develop regulations that expand the President's Pay as You Earn repayment plan by allowing more borrowers to cap their federal student loan payments at 10 percent of their income with the goal of making the expanded PAYE repayment option available to borrowers by December 31, 2015.

Negotiated rulemaking is required by law for programs authorized under Title IV of the Higher Education Act of 1965 (unless the Secretary of the Department of Education determines that doing so is impracticable, unnecessary, or contrary to the public interest).

Under negotiated rulemaking, representatives of the parties who will be affected significantly by the regulations work with the Department of Education over a series of meetings to come to consensus on proposed regulations. Negotiators are nominated by the public and selected by the Department of Education. Issues for consideration by the negotiated rulemaking committee can be raised by newly enacted laws, the Department of Education, or by the public.  

In this case, in accordance with the Presidential Memorandum issued on June 9, 2014, the negotiated rulemaking committee will address targeting the expansion of PAYE to those borrowers who would otherwise struggle to repay their loans.  

Currently, the Department of Education seeks public comment regarding the negotiated rulemaking committee’s proposed agenda.  Two public hearings are scheduled:

  • October 23, 2014, from 9:00 a.m. to 4:00 p.m. local time, at the U.S. Department of Education, 1990 K Street NW., Eighth Floor Conference Center, Washington, DC 20006.
  • November 4, 2014, from 1 p.m. to 4 p.m. local time, at the Marriott Anaheim, 700 West Convention Way, Grand Ballroom E, Anaheim, CA 92802.

Next, the Department of Education will solicit nominations for negotiators and announce the dates and locations of the negotiated rulemaking committee’s meetings (expected to be three monthly sessions of three days each beginning in February 2015).  

Then the negotiations begin. The Department of Education drafts and amends proposed regulatory language based on committee discussions and tentative agreements. If all members of the committee can agree on proposed rules and consensus is achieved, the Department of Education publishes the consensus-based regulatory language in a Notice of Proposed Rulemaking. If consensus is not achieved, the Department may develop new regulatory language for publication.  In either case, the Notice of Proposed Rulemaking contains a request for public comments and a deadline for submitting those comments. After consideration of public comments on the proposed rules, final regulations are at last published in the Federal Register.

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