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Department says auto-enrollment into IDR after rehabilitation is not feasible in regulatory text; will address steps in preamble and operations
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Summary
Negotiators debated whether borrowers who complete loan rehabilitation can be automatically enrolled in income-driven repayment (IDR). Department staff said automatic enrollment requires borrower consent and tax documentation and therefore will describe steps in the NPRM preamble and agency operations rather than mandate automatic enrollment in the regulatory text.
Negotiators pressed whether borrowers who successfully complete loan rehabilitation could be automatically placed into an income-driven repayment (IDR) plan. Alex Holt and others urged action to move rehabilitated borrowers into IDR to preserve benefits.
Department staff responded that automatic enrollment would require borrower consent and federal tax information that the department cannot obtain without proper documentation. "We can't automatically put people in, but we get the spirit of what's trying to be done here," Alex Ritchie said, summarizing the department’s position that it supports the goal but is constrained by consent and information requirements.
Jake Lalo, speaking for department counsel, said the preamble can state a general policy commitment but is not binding in the same way as a regulation. "It's different than a regulation ... it's a general statement of policy," he said, explaining why staff prefer a preamble explanation combined with operational steps rather than binding regulatory language that could be difficult to implement.
Negotiators asked the department to take the question under advisement and to present detailed options at the next session. The caucus report noted negotiators will continue discussing possible language and operational workarounds in writing before the next meeting.
