Group of Senators Push for Swift Action on Student Debt – What Could This Mean For You?

Top view on a student with bunch of overdue bills.
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A group of senators is urging the Department of Education to implement reforms to student loans ahead of Secretary Miguel Cardona’s upcoming higher education rulemaking. The group asked for the rulemaking committee panel to reflect borrowers’ voices and interests and encouraged the department to implement the rules early to provide swift relief.

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Find: A Look at Americans’ Student Loan Debt by State

“We write in support of the U.S. Department of Education’s (“Department”) regulatory agenda to provide relief to federal student loan borrowers. As part of the upcoming negotiated rulemaking process, we encourage the Department to pursue policies that reduce disparities in the burden of student debt, simplify loan repayment, close donut holes in forgiveness programs, and improve the overall confidence of borrowers in the federal student loan system,” the senators wrote in the letter. “As you assemble the negotiated rulemaking committee, we hope you will ensure the panel reflects a broad range of borrower voices and interests and the diversity of our higher education system. Additionally, we hope the Department will consider opportunities to implement these rules early and take advantage of existing statutory and regulatory authorities to provide student debt relief administratively while it finalizes the new rules.”

Save for Your Future

The effort, led by Chair of the Senate Health, Education, Labor and Pensions Committee Patty Murray and Senate Majority Leader Chuck Schumer, includes 20 other senators.

In their letter, they recommend that the department should simplify and consolidate the income-driven repayment (IDR) plans and expand the relief they provide to struggling borrowers.

“We encourage the Department to pursue IDR regulations that continue to ensure borrowers’ monthly payments are capped at no more than 10 percent of their income and for no more than 20 years,” they wrote.

In addition, they suggest that the department should reverse the Trump Administration rules that harmed student loan borrowers who had been cheated or defrauded by their schools and establish a single “borrower defense” standard for all federal student loans.

Additional recommendations include calling on the department to reinstate automatic discharges of loans from closed schools, as well “swiftly move forward with automatic discharges of loans for borrowers with significant disabilities and expand the population of eligible borrowers.”

Finally, the senators ask the department to close donut holes and improve eligibility for Public Service Loan Forgiveness and Temporary Expanded Public Service Loan Forgiveness.

According to the senators, enacting these changes for the rules governing student loan borrower repayment and forgiveness programs would help provide additional relief to struggling borrowers and close gaps in how these programs currently operate. They also say that these regulatory enhancements would also help build borrowers’ confidence in the federal student loan program’s efforts to put higher education within reach for more students, rather than creating complex or burdensome requirements that stop students from accessing or pursuing educational opportunities.

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Find: Poll: 52% of Respondents in Favor of Blanket Student Loan Forgiveness

The Department of Education has started a process of issuing new regulations about student loans issues, which include borrower defense to repayment for students harmed by their colleges’ misleading practices and gainful employment requirements to protect students and taxpayers from poor-performing programs. They also include loan repayment and improving the rules governing targeted student loan cancellation authorities for borrowers engaged in public service, with disabilities, or whose institutions close, among other topics, according to a statement.

Save for Your Future

The Department of Education’s primary responsibility is to serve students and borrowers,” Cardona said in the statement. “That means taking a fresh look at a range of regulations to make sure they are not creating unnecessary barriers, but instead can ensure that institutions and programs serve our students well.”

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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