*This memo is from Dean Gillian Lester.
To: Students and Alumni
From: Acting Dean Lester
Subject: President Obama’s Fiscal Year 2015 Budget Proposal
As you may be aware, President Obama released his budget proposal for the 2015 fiscal year on Tuesday, March 4. His proposal contains surprising changes to federal student loan repayment options and Public Service Loan Forgiveness.
Beginning with new borrowers on July 1, 2015, they will have only the Pay as You Earn (PAYE) repayment option available to them when they repay their loans. Public Service Loan Forgiveness (PSLF) will be capped at the aggregate independent undergraduate loan limit of $57,500. There will be a 25-year forgiveness period for borrowers with balances above the aggregate loan limit.
These proposed changes are important because Berkeley Law’s Loan Repayment Assistance Program (LRAP) intersects with the federal government’s current policy and regulations pertaining to the Income Based Repayment (IBR) plan and PSLF. Berkeley Law values and has provided significant support to its public service students and graduates, and it will continue to do so.
Last July, Assistant Dean of Financial Aid, Dennis Tominaga, acted on his growing concern that eventually the federal government might consider changing or eliminating PSLF because of its potential cost and the need to fund other parts of the federal budget. He urged and requested the National Association of Student Financial Aid Administrators (NASFAA) to begin collecting and analyzing data to illustrate how PSLF and income-determined repayment plans such as PAYE and IBR enable student loan borrowers to obtain the education needed to meet our society’s public service workforce needs.
NASFAA advocates for students and financial aid administrators. From March through June 2014, its PSLF Task Force will produce a report and recommendations to the NASFAA Board of Directors on the future of PSLF.
It is difficult, if not impossible to predict whether Congress will act on the president’s budget proposal that requests $56 billion in new spending. Congress has already set spending limits for the 2015 fiscal year.
I am sending this message primarily to assure you that we are aware of these proposed changes and their possible effects on Berkeley Law’s LRAP and your public service career. We will focus not only on these proposals but any others that may have similar effects. We will study them in relation to the LRAP and changes that we may need to consider.
We will stay in communication with you and provide you with information about the proposal, its status, and what Berkeley Law can and will do.
Please be assured that we will do our best to protect your interests.