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Department of Education announces new "Pay As You Earn" repayment plan, available "by the end of 2012" 
Final regulations implementing the President's new "Pay As You Earn" (PAYE) repayment plan provide for reduced payments for some federal student loan borrowers.
Among PAYE's key provisions:
- Must have no outstanding federal student loan balance as of Oct. 1, 2007
- Must have received a disbursement of a federal student loan on/after Oct. 1, 2011
- Payments limited to 10% of "discretionary income"
- Forgiveness after 20 years
- Married borrowers in community property states may use Alternative Documentation of Income
- 10% cap on interest capitalization
Learn what you need to know about Pay As You Earn in Heather's upcoming online course: Student Loan Updates for University Professionals. Register
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Fiscal Cliff: What would happen to student loans?
We wonder what Congress thinks about the closing scene of 1991's box office hit, Thelma & Louise, when the title characters reach the end of the road after evading police for the murder of a potential rapist. Their choices are to surrender or ride off the cliff, hand-in-hand, to meet their maker together.
Jumping off the "fiscal cliff" would result in mandatory spending cuts to education funding (called sequestration) beginning Jan. 1, 2013:
- 8.2 percent cuts to aid programs including federal work-study
- Higher federal student loan origination fees
- Pell Grants exempt from cuts this year; however shortfall expected in October 2013
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President Obama Wins a Second Term; What Does That Mean for Student Loan Policy?
During his first term, President Obama expanded federal student aid programs and increased regulation of higher education.
The President's stated goals for a second term include:
- Reducing tuition growth rates by half over the next decade
- Tying some federal aid programs to colleges and universities' ability to demonstrate reductions in tuition growth rates
Heather will elaborate on her expectations for legislative initiatives during a series of updates for university professionals.
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