In their fifth day of the Department of Education’s (ED) negotiated rulemaking session, committee members completed their preliminary discussion on proposed issue papers under consideration for the week with the final day’s agenda working through income-driven repayment (IDR) plans, false certification discharge, and Pell Grant eligibility.
The morning session began with a pair of lengthy caucus discussions which upon reconvening re-raised and tabled the prospect of adding additional topics to the committee’s agenda focused on debt collection and defaulted student loan borrowers.
ED reiterated that it shares concerns members have over the financial well-being of student loan borrowers in default and noted that debt collection rules are on the regulatory agenda.
Jennifer Hong, ED’s federal negotiator, pointed out that the applicable debt collection statutes exist largely outside of the Higher Education Act (HEA) and are thus not subject to the negotiated rulemaking process. According to Hong, because of this, department reforms on default could be addressed more quickly than they would be through the regulatory process.
Members then moved onto IDR with Issue paper #10 where ED expressed interest in creating a new IDR plan. Raj Darolia, a professor of public policy and economics serving as an advisor to the negotiating committee, provided the committee with a simulation of IDR repayments using some of the proposals raised by ED and negotiators, such as increasing the percentage of the poverty line used to protect income and lowering the percentage of discretionary income borrowers would be expected to pay.
Darolia noted that ED was interested in collecting additional information on participant enrollees to better inform guidance since participation in IDR enrollment has increased in recent years.
In terms of the issue paper for IDR, committee members urged more automation, including cross-agency data sharing to circumvent the issues of lack of awareness of the availability of IDR and the difficulty borrowers face in applying for IDR and recertifying their income annually.
Continuing with the focus on simplicity, Rachelle Feldman of the University of North Carolina at Chapel Hill, serving as an alternate for four-year public institutions, also urged ED to cut down on the number of IDR plans, saying “I just want to make a real plea to have fewer pathways so that it will be less confusing for everyone, not just our PSLF borrowers but our borrowers at every level.”
Brian Siegel, of ED’s office of general counsel, said that in terms of automation the department is working with the IRS to implement data sharing as mandated by the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act, but in order to access more data from separate agencies would need Congress to approve other cross-agency data sharing to automate other proposed aspects of automation for the student loan repayment system.
Negotiators kicked off the afternoon portion again discussing ED’s proposals on IDR, giving points on what design factors and changes would better support borrowers at high risk of delinquency and default or otherwise encourage enrollment in IDR plans.
Negotiators overwhelmingly shared their desire for ED to allow borrowers to self-certify their income in order to enroll in an IDR plan when they have no earnings. John Whitelaw, of the Community Legal Aid Society, said forcing a borrower to prove they are low-income is “excruciatingly painful” for them, and other negotiators noted oftentimes borrowers are being asked to procure documents they simply don’t have access to.
Hong said the goal of this discussion was to get feedback on ED’s proposals as opposed to seeking agreement on proposed regulatory text, so no temperature check was needed. ED intends to use the feedback garnered to develop text for negotiators to consider in a later negotiating session.
The negotiators then transitioned to Issue Paper 12, which focuses on Pell grants for prison education programs and establishing a regulatory framework that institutions would follow in order to launch and administer such a program.
Negotiators were reminded that this topic has its own dedicated subcommittee to further discuss the topic in detail later this month. No temperature checks were taken on this topic, though negotiators heard from those involved in this space on how regulatory language can be inclusive and student-centered, taking into account the unique challenges and barriers this population faces with respect to postsecondary education.
After briskly moving through the previous topics, negotiators turned to Issue Paper 11, which focuses on false certification discharge of student loans.
Several solutions on this topic were put forward by ED, all of which yielded tentative agreement when it came time for temperature checks. ED is proposing one set of regulatory standards to cover all false certification discharge claims.
“This would provide more clarity to borrowers and ensure that all borrowers applying for false certification discharges are treated under the same standards,” according to the issue paper.
ED is also calling for explicitly stating in the regulations that all loans may qualify for the discharge based on a false certification of high school diploma or equivalent by the school.
ED put forth a solution to rescind the provision in the regulations that any borrower who attested to having a high school diploma or equivalent does not qualify for a false certification discharge, to account for instances where the student was coerced by their school to provide incorrect information.
ED is also proposing specifying that the secretary of education may grant a false certification discharge without an application due to falsification of Satisfactory Academic Progress (SAP) for all loans, which would provide clarity to borrowers and institutions and ensure that all borrowers are treated under the same standards, according to ED.
Other noteworthy solutions presented by ED that garnered tentative agreement from negotiators include removing the requirements that borrowers submit signature specimens when applying for discharge as evidence of false certification (retaining the option for borrowers to do so), and replacing the requirement that a borrower provide a judicial determination of identity theft with the option for the borrower to provide alternative evidence, such as filing a police report or disputing the loan through all three credit bureaus, among other examples.
Hong expressed her hope that negotiators would reach agreement quickly when the department offers proposes false certification discharge regulations at the next round of negotiated rulemaking sessions, given that negotiators raised a minimal number of concerns and agreed generally with the department’s goals on this topic.
Facilitators then went through each of the twelve issue papers to see if there were any final outstanding comments from negotiators that could shape ED’s thinking and regulatory framework on the various topics.
“I want to thank each and every one of these committee members for your service,” Hong said in conclusion before outside comments were heard. “We've really appreciated the thoughtful deliberation at the table. ... We realize this is a devotion of your time, and we thank you for your service to talk about these very important issues for students and borrowers.”
Publication Date: 10/9/2021