Skip to content Menu

The Department of Education has taken the next step toward expanding income-driven repayment for federal student loan borrowers and opportunities for institutions to challenge or appeal their cohort default rates (CDR) and is seeking public comment on the proposed changes through August 10.

The Notice of Proposed Rulemaking (NPRM), released in mid-July, includes text for the package of issues subjected to negotiated rulemaking in spring 2015. Negotiators reached consensus on the entire package, binding ED to the agreed-upon language during negotiations for the NPRM.

  • Revised Pay As You Earn (REPAYE). Following a mandate by President Obama to expand Pay As You Earn (PAYE), ED proposed creating a new income-contingent repayment plan, now known as REPAYE. The NPRM provides that all Direct Loan student borrowers would be eligible for REPAYE and would qualify based on income and family size. Time to forgiveness would be tiered based on whether a borrower had only undergraduate loans (20 years of qualifying payments) or borrowed for graduate study, as well (25 years).
  • Participation Rate Index (PRI) challenges and appeals. An institution with a low PRI may be eligible to avoid consequences for a high draft or final CDR. The NPRM would allow schools with CDRs between 30 and 40 percent in any of the three most recently calculated fiscal years to submit a timely challenge or appeal based on their PRI. In some circumstances, institutions with CDRs in that range will not lose provisional certification if they appeal or challenge in a timely fashion and have a PRI of .0625 or below. Institutions that are successful in challenging their draft CDRs will be exempt from provisional certification or a loss of eligibility if, when the official CDR is released, it is less than or equal to the draft rate.

The NPRM also includes proposed changes specific to certain borrowers, including service members and those transitioning from loan rehabilitation.

NACUBO encourages members to contact ED with feedback on the proposed changes.


Liz Clark

Vice President, Policy and Research



Bryan Dickson

Director, Student Financial Services and Educational Programs


Related Content

NACUBO Updates Student Agreement Language to Address Assessment of Collection Fees

NACUBO’s updated advisory, Best Practices for Student Financial Responsibility Agreements, includes model language for the agreements and addresses court decisions affecting the ability of an institution to recover costs associated with collections, among other topics of interest to business officers.

ED Shares Details on New Borrower Defense Policy

When considering approved borrower defense to repayment claims, the Department of Education will now apply a presumption of full relief as the starting point and will reduce the amount of relief offered, if warranted, by evidence provided by a school, a borrower, or other sources.

2021 NACUBO Student Financial Services Benchmarking Report Released

New data indicate electronic student payments and credit balance refunds have continued to increase during the COVID-19 pandemic. The report also provides benchmarking data on several other measures, including: student account and loan receivables; third-party payments; staffing; and expenditures for student financial services.