The Biden-Harris Administration announced that it will hold an additional negotiated rulemaking session on February 22 and 23 focused on the issue of providing relief for borrowers experiencing hardship. The session is a continuation of work that began last summer when the Administration announced it would pursue a new regulatory process to deliver student debt relief to as many borrowers as possible. These efforts build on the Administration’s approval of more than $136.6 billion in targeted relief for over 3.7 million Americans through various actions. The session will focus exclusively on issues related to hardship, including regulatory text provided at least a week in advance for review by the negotiators and the public. Sessions will be held virtually from 10 AM to 4 PM Eastern Time. There also will be one hour of public comment from 3 PM to 4 PM at the end of the first day.
Separately, the U.S. Department of Education is continuing its work on draft rules covering other issues discussed at the third session, for publication later this year. This effort includes relief for borrowers whose balances exceed what they originally borrowed, who first entered repayment long ago, who are eligible for relief but have not applied for it, or who attended programs or institutions that failed to provide sufficient financial value. Those issues will not be discussed at this session because the Department already has sought consensus on that regulatory text.
College Cost Reduction Act
The College Cost Reduction Act (H.R. 6951) was introduced on January 11, 2024 by the House Committee on Education and the Workforce. An impetus for seeking a legislative remedy is that student loan debt is too high, completion rates are too low, and far too many students are left worse off after paying for postsecondary education than if they had never enrolled in the first place. A belief is that for too long, policymakers have relied on patchwork “solutions” that exacerbate these problems without addressing their root cause; which is the inflated cost of obtaining a college degree. The 223-page bill is aimed at responding to challenges, such as rising student loan debt levels, affecting students in postsecondary education. Major sections of the bill involve: Accountability and Student Success; Transparency; and Access and Affordability.
H.R. 6951 was passed by the committee on a party-line vote on January 31. The next step is for the bill to move to the House floor for a vote, but no date has been set for doing so. An analysis by the American Council on Education indicates that although there will not be a comprehensive reauthorization of the Higher Education Act this session of Congress, the proposed legislation operates as a blueprint to solutions proposed by Republican members on the committee.
Student Debt Relief
The Administration announced on January 19 the approval of $4.9 billion in additional student loan debt relief for 73,600 borrowers. These discharges are the result of fixes made by the Administration to income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF). Total loan forgiveness approved amounts to $136.6 billion for more than 3.7 million Americans. Debt relief is broken down into the following categories:
· $1.7 billion for 29,700 borrowers through administrative adjustments to IDR payment counts that have brought borrowers closer to forgiveness and address longstanding concerns with the misuse of forbearance by loan servicers. Including the present announcement, the Administration has approved $45.7 billion in IDR relief for 930,500 borrowers.
· $3.2 billion for 43,900 borrowers through PSLF, which includes borrowers who have benefitted from the limited PSLF waiver as well as regulatory improvements made to the program. Total relief through PSLF is $56.7 billion for 793,400 borrowers since October 2021.