The final day of the Department of Education’s (ED) week of opening negotiated rulemaking hearings where stakeholders shared their thoughts on a slew of topics ED will consider in the coming months, with the participants again focusing on reforming the student loan lending program and calling on the department to address the growing cost to attend college.
Bringing back effective gainful employment regulations, fixing the Public Service Loan Forgiveness (PSLF) program, and ensuring more students can access income-driven repayment (IDR) plans garnered much of the attention Thursday as the final day of hearings exceeded the expected duration as ED allowed more stakeholders to share.
The hearings are meant to help inform ED as the department’s next step in the process is to accept nominations for negotiators to serve on negotiated rulemaking committees as part of the undertaking required to develop regulations for programs under Title IV of the Higher Education Act (HEA).
Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit that helps student loan borrowers with free advice and dispute resolution, used her time to call for the expansion of IDR plans, noting that these types of repayment plans are invaluable to borrowers with high student loan debt in relation to their income but the plans are not available to all borrowers, particularly those who took out Parent PLUS Loans.
“I frequently work with Parent PLUS borrowers who have been awarded student debt amounts that far exceed their total household income, while some of these borrowers may stumble upon the requirement of consolidating their loans to access the income-contingent repayment plan, as this plan is the only plan that takes 20% of a borrower's discretionary income. It is often unaffordable to many of those families, especially those living paycheck to paycheck,” she said.
Many speakers on Thursday — including NASFAA’s Director of Policy Analysis Karen McCarthy — urged ED to reduce complexities in the IDR and income-contingent repayment (ICR) plans so more borrowers can utilize them.
“ED has used its ability to define ICR to create new plans, with only minor differences, layered upon one another. This has added to borrower confusion about repayment, and also makes it difficult for those counseling them. In this negotiation, we urge the department to stop tinkering with ICR and, instead, revisit ICR terms and conditions with an eye toward streamlining the number of ICR plans,” she said.
Regarding the much-maligned PSLF program, McCarthy noted it is in need of a legislative overhaul, but outlined ways in which ED can improve the program in upcoming rulemaking hearings, such as changing current rules that force borrowers to make more than 120 payments by requiring that they continue to be employed in public service both when they apply, and at the time forgiveness is granted.
Requiring just 120 payments, consistent with the law, will ensure that more borrowers who have dedicated a decade of their lives to public service receive the forgiveness they earned,” McCarthy added. “Broadly, we urge Congress and the administration to revisit PSLF program design with an eye toward ensuring the program is equitable, fair, and achieving its desired goals.”
Thursday’s hearing was marked with numerous borrowers who detailed their experiences being denied forgiveness through the PSLF program even though they were led to believe they had met the requirements.
Ella Azoulay, the higher education program coordinator for Generation Progress, said the department should use the neg reg hearings to strengthen the cohort default rate measure and said ED can do more to prevent struggling borrowers from entering default on their student loans.
Gainful employment was also a prominent topic of discussion Thursday, as Tanya Ang, Higher Learning Advocates’ senior advocacy director, argued that as students return to postsecondary education to gain new skills following the coronavirus pandemic that greatly disrupted the labor market, ensuring they can receive a strong return on investment should be a priority for ED.
She called for ED to use the 2016 Obama-era regulation as a “baseline” for a new regulation and noted that “higher education is an opportunity for low-income individuals to increase their socioeconomic mobility.”
“It can change their lives in ways they never thought possible,” she said. “Unfortunately, the current cost of education is also a significant barrier to accessing higher education for these same students.”
Considering the scope of what ED is trying to achieve in the upcoming negotiated rulemaking hearings, McCarthy said it made sense that the department is convening multiple negotiating committees.
“We recommend separate consensus votes for each committee,” she said. “This will ensure that the department can select negotiators who are experts in certain topic areas, assuring that any consensus language agreed to by negotiators takes into account the history and nuance of the topic.”
Publication Date: 6/25/2021