ED Releases Draft Regulatory Text to Provide Student Debt Relief Through Neg Reg

By Maria Carrasco, NASFAA Staff Reporter

The Department of Education (ED) on Monday outlined options for student debt relief in draft regulatory text that detailed proposals for four different subsets of borrowers.

The text was released ahead of next week’s negotiated rulemaking session, the process by which the Biden administration is hoping to move forward with its debt relief plans after the U.S. Supreme Court struck down its initial proposal for widespread student debt relief.

ED kicked off its first committee session of negotiators in October, gathering a committee of stakeholders from the higher education community representing 16 constituency groups. The committee discussed several ideas and solutions to providing debt relief to borrowers. 

During the October session, ED made it clear that the department is not looking to implement a broad-scale student loan cancellation policy. Under Secretary James Kvaal told negotiators that ED is “particularly focused on the waiver authority,” meaning ways that the secretary can exercise his authority to grant waivers for student loan debt relief.

Monday’s draft regulatory text specifies four groups of borrowers who could be provided debt relief. That includes borrowers who: currently have outstanding federal student loan balances that exceed what they originally borrowed; borrowers who have loans that first entered repayment 25 or more years ago; and borrowers who took out loans to attend career-training programs that created “unreasonable debt loads” or “provided insufficient earnings for graduates, as well as borrowers who attended institutions with “unacceptably high student loan default rates.” 

Additionally, the text states that the secretary may be able to provide forgiveness to borrowers who are be eligible for forgiveness under repayment plans have not yet applied, such as income-driven repayment (IDR), or targeted relief programs like Public Service Loan Forgiveness (PSLF) or closed school loan discharges. 

Along with the regulatory text, ED released an issue paper outlining questions for the committee to consider a fifth group of borrowers – those “experiencing financial hardship that the current student loan system does not currently adequately address.” Questions in the paper include: which types of borrowers may be experiencing hardship; if the hardship process was based on an application, what criteria should be put in place; what types of administrative data might be available to ED to identify borrowers going through hardships; and more. 

ED said that the forgiveness delivered to borrowers through negotiated rulemaking will “build on the historic actions the Biden-Harris Administration has already taken to provide student debt relief to millions of Americans.”

“We are fighting to ensure that student debt does not stand in the way of opportunity or prevent borrowers from realizing the benefits of their higher education,"  Education Secretary Miguel Cardona said in a statement. 

ED in a press release said that negotiators will spend the afternoon of the second day of the next session discussing the issue of hardship. The next negotiated rulemaking session is slated for November 6 and 7. Updates in the negotiated rulemaking process and a link to register to watch November's sessions online will be posted on ED’s website.


Publication Date: 10/31/2023

Jeff A | 10/31/2023 11:23:36 AM

"Unreasonable debt loads" (based on an arbitrary formula), or 'provided insufficient earnings'. Institutions 'provide' earnings? hmm. Anyone that ever attended a program that fails an arbitrary GE formula is entitled to have ALL debt erased. Followed by recoupment? But only for 'career-training programs'...i.e. targeting for-profits...for now. This truly is incredible.
Vilify MOHELA for struggling to hit a moving target so all their serviced loans can be put in forbearance (they sued ED over the big forgiveness plan). Why would anyone want to service student loans. You won't survive it.

James C | 10/31/2023 10:22:27 AM

I agree that loans that have been in repayment for 25 years or more should be considered for forgiveness, but any loans that are forgiven should count as taxable income so the taxpayers at least get something back as should the loans given to businesses during Covid.

Ben R | 10/31/2023 9:23:11 AM

The compromise authority proposed is that if it costs more to collect the loan than what you are likely to recoup from a borrower, you should just cancel the loan. This makes sense in theory, but this likely applies to a significant percentage of all loans in the portfolio, if not the majority of all PLUS and graduate loans and amounts to hundreds of billions of dollars.

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