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ED Officials Give Updates on FAFSA Simplification, SCOTUS Cases, and Other Initiatives at NASFAA 2023

By Maria Carrasco, NASFAA Staff Reporter

As the higher education community grapples with the latest news around this week’s U.S. Supreme Court (SCOTUS) decisions and subsequent response from the Biden administration, officials from the Department of Education (ED) provided attendees with updates on FAFSA simplification and other federal initiatives in two sessions on Saturday morning. 

Melanie Storey, director of policy implementation and oversight at ED, led the first general session on Saturday morning focusing on updates around negotiated rulemaking. Her updates touched on yesterday’s announcement from the White House of its final rules for a new income-driven repayment (IDR) plan, the “Saving on A Valuable Education (SAVE)” plan. 

While the regulations will not go fully into full effect until July 1, 2024, ED announced on Friday that it will implement three benefits before the end of the student loan payment pause, set to expire on September 1. Those benefits include: raising the protected income level from 150% to 225% of the federal poverty guidelines (FPL), which will expand eligibility for borrowers who will be required to make $0 repayments; monthly interest not covered by the SAVE plan will no longer be charged; and a spouse’s income will no longer be required for a payment calculation if married borrowers file their taxes separately.

Storey said the final regulations of the SAVE plan will be up for public inspection on Monday, and attendees can expect final publication of the regulation in the Federal Register on Friday, with early implementation in the summer. 

Storey also noted that the application for institutions to develop Prison Education Programs is now live and that ED will have more updates on gainful employment rules this summer. Additionally, attendees can soon expect a new Dear Colleague Letter (DCL) about third-party servicers. Storey added that ED will not implement any guidance about third-party servicers until six months after the publication date. 

She also touched on yesterday’s announcement that the Biden administration will try to carry out its student debt relief plan through negotiated rulemaking. She said at the moment, she doesn’t have much information about the negotiated rulemaking sessions. 

“The timing around the table is not clear to me,” Storey said. “This is some fast-moving information. But what we do know is that there will be an initial public hearing on July 18, for those who wish to comment.”

Federal Student Aid (FSA) Chief Operating Officer Richard Cordray said during his keynote address following Storey’s session that the court’s decision to overturn Biden’s student loan debt relief plan is a “great disappointment” and gave more information on how the Biden administration will try to implement his plan through authority under HEA. 

“One thing about [negotiated rulemaking] is that these processes do not go fast,” Cordray said. “So it takes some time and they will no doubt be subject to legal challenge. … The president is determined to fight for this relief, and I'm glad that he does. We will see what happens on that front.”

Another key part of the Biden administration’s response was its 12-month “on-ramp” to get borrowers back to repayment. During  that period, which begins on September 1, interest would still accrue on student loan balances, but a borrower would not enter into default status. Storey said the work ED is doing to bring borrowers back to repayment is “unprecedented.” 

“We will work diligently to get students prepared to reenter repayment, to make sure that they get into the best repayment plan for them, which for many we hope is the new IDR plan,” Storey said. “But there will be an on-ramp to help students do that. This is unprecedented. We've never had to bring the entire portfolio back into [repayment]. And so it's important that we do it carefully, in partnership with our borrowers.”

Cordray echoed that sentiment during his keynote address.

“I can say this from my background in consumer protection, never before have we had so many Americans — 40 to 45 million — take a hiatus for more than three years on one of their major financial obligations,” Cordray said. “We will be working to try to soften the consequences to the extent we can.”

A key question posed to Storey from NASFAA President and CEO Justin Draeger was when the 2024-25 FAFSA is expected to be released. Storey said that while she still doesn’t have the specific date ready, the new FAFSA is expected to be released sometime in December.

“I don't have a date,” Storey said. “I don't know when I can tell you with specificity other than to tell you we will share it as soon as possible.”

However, Storey did note that July will be a “fruitful” month for information on FAFSA simplification. Specifically, ED will release a glossary of terms included in the FAFSA Simplification Act, and the FAFSA specifications guidelines 2 and 3. Storey also noted that ED is in the final stages of clearing the 2024-25 FAFSA simplification implementation Dear Colleague Letter.

“For years, we were talking about FAFSA simplification and how great it would be to get data directly from the IRS, and it is going to be great,” Storey said. “But with great power comes great responsibility. And that is just a lot of what drives our careful implementation of this work. It is some of the most sensitive and protected data in the federal government. And so we need to be very, very deliberate in our collaboration with them.”


Publication Date: 7/1/2023

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