Cardona Talks Loan Cancellation, Data Sharing, 2023 Budget With Senate Appropriators

By Hugh T. Ferguson, NASFAA Senior Staff Reporter

Education Secretary Miguel Cardona appeared before the Senate Appropriations Health, Education, Labor, and Pensions (HELP) subcommittee to discuss the Department of Education’s (ED) budget for fiscal year 2023, updates on the student loan portfolio, investments in higher education programs, and more developments within the department.

Tuesday’s discussion came on the heels of a pair of House committees receiving updates on President Joe Biden’s budget request and higher education investments. The White House’s budget proposal, which would impact award year 2023-24, includes $88.3 billion in discretionary funding for ED programs — a 17% increase from the 2022 enacted level, including $26.3 billion for federal student aid programs. Specifically, the budget proposal would commit to doubling the maximum Pell Grant by 2029, starting with an increase to $8,670 for the 2023-24 award year, $1,775 more than the 2022-23 maximum award.

“Today’s hearing is about more than the president’s proposed investments for education in the fiscal year 2023,” Cardona said. “It's about the needs of our students and how we can meet them if we work together.”

Subcommittee Chair Sen. Patty Murray (D-Wash.) thanked Cardona for the administration's efforts to bring about long-term solutions to the student loan portfolio through the department’s limited waiver expanding the eligibility requirements of the Public Service Loan Forgiveness (PSLF) program and changes to income-driven repayment (IDR) plans, but underscored that she wanted to see the administration take more action on student loan debt.

“For too long these programs were mismanaged and the previous administration simply ignored struggling borrowers who were asking for help. I am glad to see that change under President Biden, but I am not content and I won’t be until we finally have a system that actually works for students and borrowers,” Murray said.

Murray urged the administration to extend the current pause on loan payments and interest accrual until “at least 2023,” to forgive some student loan debt for all borrowers, and work to create “a student loan system that provides real help, especially to those who need it the most.”

Throughout the hearing, Democrats looked to glean more insight into ED’s plans regarding the repayment pause, with Sen. Jeanne Shaheen (D-N.H.) looking for clarity on when the pause will come to an end and what the department is doing to keep borrowers informed about an eventual resumption of payments.

Cardona said that past decisions to extend the student loan payment pause were made through information provided by the Federal Reserve, and that discussions were still ongoing.

“We do, as I said last year, want to provide our borrowers a long on-ramp so that they understand when it’s going to start to better prepare them for this process,” Cardona said. “I know that we have a date and it could be extended, or it could be that it starts there.”

Ranking member Sen. Roy Blunt (R-Mo.), who is retiring at the end of this congressional session, largely thanked Cardona for his work to implement investments in higher education, including increases to the Pell Grant program.

Blunt did question Cardona on a pair of concerns related to student and parent data being inadvertently shared with Facebook through the website students use to fill out their FAFSA, as well as potential student loan forgiveness.

On the data sharing concerns, Cardona indicated that ED would be sharing additional details on its investigation. Cardona said that in May 2020, the department “inadvertently activated a more sophisticated advertising tool” that shared some personal information and was “immediately stopped” once the Biden administration learned of the tool.

“We are moving quickly to investigate this and find out what was shared,” he said.

Blunt questioned whether there were more incidents in 2022 that also led to data sharing and Cardona committed to being open and transparent on sharing more information with Congress.

Blunt also took issue with potential efforts by Biden to implement “illegal” widespread student loan forgiveness, saying it would be “unconscionable” for taxpayers who did not attend college to have to foot the bill.

Throughout his remarks, Cardona looked to underscore that while conversations on the possible parameters of student loan debt cancellation were ongoing, ED would also aim to implement long-term systemic reform to ensure student loan debt does not continue to balloon.

“We take the work of fixing a broken system very seriously,” Cardona said. “What we don't want to do is end up in a situation where five years from now we have the same problems that we have today.”

 

Publication Date: 6/8/2022


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