PayrollOrg Comments on Proposed Student Loan Rulemaking

PayrollOrg’s Government Relations Task Force (GRTF) Garnishments Subcommittee commented on the U.S. Department of Education’s (ED) proposed negotiated rulemaking committee. The negotiated rulemaking will create regulations for student loan relief. However, PayrollOrg took the opportunity to remind the ED about needed student loan repayment guidance.

Top Payroll Concerns

PayrollOrg’s concerns centered around four issues:

(1) Creation of a grace period for restarting. PayrollOrg requested a more flexible grace period to allow employers to receive and process orders after the startup. Normally, employers that receive student loan orders must process and withhold payments on the first pay period after the order is issued.

(2) New orders needed. At the end of the forbearance period, employers will require new orders for student loan garnishments to resume, PayrollOrg said. Employers cannot process a wage withholding order without receiving official documentation identifying the current amount owed and when to begin withholding from the employee’s disposable earnings.

(3) Guaranty agency guidance. PayrollOrg recommended that the ED advise guaranty agencies to follow the same procedure the ED adopts for restarting the student loan repayment process. Previously, the largest agencies informed PayrollOrg members that they wanted just to resume repayment without new orders to maintain the priority of their orders.

(4) Payment location. The payment address must be clearly communicated on all new orders. Employers were previously notified that the current payment address was closed by the ED.

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Alice P. Jacobsohn, Esq., is Director of Government Relations at PayrollOrg.