Higher Ed Policy Roundup: Vol. 5 - Issue 23

This month, the U.S. Department of Education (ED) began the first steps in the long process of negotiated rulemaking related to federal student aid programs by holding public hearings and soliciting public comments. Topics under discussion include borrower defense to repayment; gainful employment; loan repayment; and targeted student loan cancellation for borrowers engaged in public service, those with disabilities, or whose institutions close, among other topics. AccessLex Institute CEO Chris Chapman spoke at the public hearing and the Company submitted comments to ED regarding changes to the Public Service Loan Forgiveness (PSLF) program, income-driven repayment (IDR) plans and loan discharges for borrowers with a total and permanent disability. Read AccessLex’s comments here.  

The House Education and Labor Committee held a hearing last week titled "Examining the Policies and Priorities of the U.S. Department of Education” where Education Secretary Miguel Cardona testified. In his opening remarks, Secretary Cardona discussed the negative impact that the pandemic has had on students, his desire to make them whole again, and his plans to make good on President Biden’s commitment to invest in education and address inequities in the system. When asked about ED’s plan to address issues around the PSLF program and IDR plans, Secretary Cardona admitted that ED needed to be overhauled and that borrowers needed to be the center of attention. You can watch the hearing here.

On Wednesday, Sen. Patty Murray (D-WA) and Rep. Bobby Scott (D-VA), chairs of the Senate and House education committees, sent a letter to Secretary Cardona urging him to extend the pause on payments for federally-held student loans, which is set to expire on September 30, 2021. Chairwoman Murray and Chairman Scott said that the pause should be extended until early 2022, during which time ED should “conduct a robust outreach campaign to ensure borrowers are aware of the upcoming return to repayment and are prepared to resume paying their loans.”

The Federal Reserve Bank of Richmond released an economic brief titled: Should More Student Loan Borrowers Use Income-Driven Repayment Plans? Their analysis found that IDR plans are most popular among middle-income families and not lower-income families who would theoretically stand to benefit more from the lower or zero monthly payments available to enrollees. 

A state-by-state look at Americans’ student loan debt.

The following bills have been recently introduced for consideration by the 117th Congress (2021-2022):

H.R. 4122 – Resident Education Deferred Interest Act (REDI) Act [Rep. Brian Babin (R-TX-36)] would allow student borrowers that serve in a medical or dental internship or residency program to defer their student loans interest-free.

H.R. 4293 –  Supporting America’s Young Entrepreneurs Act [Rep. Nydia Velazquez (D-NY-7)] would provide up to three years of interest-free student loan deferment to startup business founders and up to $20,000 in loan forgiveness for entrepreneurs that create new ventures in economically distressed areas.