ED Releases Updated Draft Regulatory Text for Student Debt Relief

By Maria Carrasco, NASFAA Staff Reporter

The Department of Education (ED) on Monday released an updated draft regulatory text to provide student debt relief to several groups of borrowers ahead of next week’s third and final negotiated rulemaking session.

The draft regulatory text is part of the Biden administration's attempt to cancel debt through the negotiated rulemaking process — known as neg reg — for certain borrowers after the U.S. Supreme Court struck down the administration's initial student debt relief plan. The negotiating committee will meet next Monday and Tuesday, December 11 and 12, to discuss the newly updated draft regulatory text.  

In its first draft regulatory text released in October, ED specified four groups of borrowers who could be provided debt relief. In Monday’s update, the four groups mostly remain the same. 

That includes borrowers whose balances are greater than what they owed upon entering repayment; borrowers whose loans first entered repayment many years ago; borrowers who are eligible for forgiveness under income-driven repayment (IDR) plans or discharge opportunities such as Public Service Loan Forgiveness (PSLF) but have not yet applied for such relief; and borrowers who attended programs or institutions that failed to deliver sufficient financial value. 

ED clarified in a press release that it will continue to consider relief options for borrowers experiencing financial hardship that the current loan system does not address, and will be dedicating time to this topic in the upcoming negotiating session. A full agenda of next week’s neg reg session was posted on ED’s website

“While the Department is not providing proposed regulatory text related to defining hardship for borrowers, the Department will consider ways to pursue relief for this category of borrowers and has dedicated time to address this issue during the December session,” ED wrote in a press release.   

ED outlined additional details in the draft regulatory text on eligibility and other requirements, including a proposal that would provide up to $10,000 of relief to all borrowers who have experienced balance growth due to interest. Additionally, borrowers whose balances are greater than what they owed upon entering repayment, are enrolled in an IDR plan, and whose income is below 225% of the poverty line could receive $20,000 in forgiveness from their outstanding student loan balance. 

For borrowers whose loans first entered repayment many years ago, ED updated its proposal to provide one-time relief for borrowers who entered repayment 20 years ago and only for undergraduate loans. All other borrowers would receive forgiveness on loans that entered repayment 25 years ago, ED stated. 

For borrowers who attended programs or institutions that failed to deliver sufficient financial value, ED added language to include forgiveness for borrowers in situations where institutions or programs lose access to federal student aid due to actions that financially harm students, such as misconduct. 

Education Secretary Miguel Cardona said in a statement that the administration knows there are “so many hard working Americans and families” who need help with their student loans.

“This rulemaking process is about standing up for borrowers who’ve been failed by the country’s broken student loan system and creating new regulations that will reduce the burden of student debt in this country,” Cardona said in a statement. 

Those interested in watching next week’s neg reg can register to watch virtually. Additional documents from the student debt relief neg reg process can be found on ED’s website. Stay tuned to Today’s News for more updates about this negotiated rulemaking


Publication Date: 12/5/2023

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