June 9, 2014 - This afternoon, President Obama will announce a plan to expand the "Pay as You Earn" (PAYE) loan repayment option to additional federal loan borrowers through executive order. Under PAYE, federal Direct Loan borrowers may cap their monthly repayment at 10 percent of their discretionary income, but in order to qualify, students must be a new borrower on or after October 1, 2007 and received a disbursement on or after October 1, 2011. The President's announcement would expand the PAYE plan to certain older Direct Loans that are currently ineligible, but the U.S. Department of Education will need until December 2015 to enact regulations to facilitate the expansion. In conjunction with the executive action, it is also expected that the Department will begin to renegotiate contracts with federal student loan servicers in order to provide financial incentives to help borrowers prevent loan delinquency or default.
Tomorrow at 2:30 pm EDT, the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education (LHHS-ED) will markup its fiscal year (FY) 2015 funding bill. The LHHS-ED Subcommittee received an overall 302 (b) level of $156.8 billion. This is level funding from current FY 2014, and $1 billion above the House allocation for FY 2015. The audio from the markup will be streamed live, with additional info at: http://www.appropriations.senate.gov/event/lhhs-subcommittee-markup.
The Senate is expected to act this week on two bills that impact higher education. First,on Wednesdaythe Senate will begin consideration of Senator Elizabeth Warren's (D-MA) student loan refinance bill that would allow eligible borrowers to refinance older FFELP or Direct Loans, as well as private educational loans, at current federal interest rates. The Senate is also expected to consider a bipartisan veterans bill that would extend Post 9/11 GI Bill educational benefits to surviving spouses of military members who died in the line of duty. It would also require public colleges and universities receiving Post 9/11 GI Bill educational benefits to charge in-state tuition rates to recently separated veterans.