Today, the Obama Administration issued final regulations for its new Pay As You Earn student loan repayment program. 77 Fed. Reg. 66088. The program enhances graduates’ (including law graduates') ability to repay their student loans, and it nudges graduates toward public service work.
With minor exceptions, the program will apply to higher-education graduates who graduated beginning last May. Graduates who not do public service work need repay only about 7% of their income toward their federally guaranteed or federally-issued student loans for 20 years. After 20 years, all remaining principal and interest is forgiven. Graduates who do 120 months of public service work (at least 30 hours a week for any federal, state, or local government, or any 501(c)(3) organization) receive forgiveness after 10 years instead of 20 years.
This is an entitlement program, established under authority granted by Congress in 1993, 2007, and 2010 but not exercised until now. No appropriations are necessary.