Last week the U.S. Department of Education released some new regulations governing various federal student loan issues. Here’s a handy overview of the details:

• The “new and improved” IBR program, as I’ve been calling it, will be called the “Pay As You Earn” program. This new repayment plan option for “new borrowers” will allow for monthly payments of 10% of discretionary income (as opposed to 15%) and a 20-year repayment term (as opposed to 25 years), with forgiveness of the remaining balance thereafter. As I’ve written about previously, this is a great repayment plan option, but it won’t be available to most borrowers who have already graduated and are in repayment now. The regulations confirm that the Dept. of Education will exclude most of these borrowers from the “Pay As You Earn” program.
• The regulations also attempt to streamline the process for applying for a discharge of federal student loans on the basis of Total and Permanent Disability. Specifically, the regulations allow for some Social Security Disability determinations to support discharge applications, and the regulations make it easier for a representative to assist the borrower in the discharge process.
• Finally, the new regulations try to address some of the ongoing problems with federal loan servicing by offering simpler IBR recertification forms.

Ultimately, these new regulations are a mixed bag. They certainly include some positive changes for federal student loan borrowers, but they do little to aggressively address systematic problems with the federal loan borrowing and servicing system. To read all the details on the new regulations, click here.