Higher Ed Policy Roundup: Vol. 5 - Issue 41

On Wednesday, it was reported that the Education Department (ED) began cancelling the debt of thousands of student loan borrowers who qualified for Public Service Loan Forgiveness (PSLF) through a new temporary waiver of certain program requirements. Recall that, in early October, ED announced plans to overhaul the PSLF program with the aim of extending relief to additional student borrowers. The cancelled loans account for 10,000 student borrowers with a total of $715 million in student loan debt. ED expects to cancel the student loan debt of an additional 20,000 borrowers by the end of the week.

The Pennsylvania Higher Education Assistance Agency (PHEAA), a federal student loan servicer responsible for managing nearly 1.3 million accounts, announced that it has finalized an agreement with the Office of Federal Student Aid for a one-year extension of its contract through December 2022 to help borrowers transition to a new servicer. Recall that the servicer previously announced that it would not extend its contract with ED beyond December 14, 2021 stating that the contract had “grown increasingly complex and challenging while the cost to service those programs increased dramatically.”

Plaintiffs in Harvard and University of North Carolina affirmative action cases ask Supreme Court to hear the cases together, potentially setting up a more sweeping ruling.

A new report on student debt and the federal budget from the Bipartisan Policy Center finds that about a third of Direct Loan borrowers are enrolled in an income-driven repayment plan and that Black borrowers were more than three times as likely to default on their student loans as White borrowers. It also proposes exploring a cap on Grad PLUS loans, but acknowledges that could potentially harm low-income students and students of color.

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

H.R. 5890 – Student Loan Borrower Safety Net Act [Rep. Suzanne Bonamici (D-OR-1)] would give additional consumer protection to borrowers during the transition period following the end of the COVID-19 student loan repayment pause. Some provisions include requiring expanded outreach from lenders, giving borrowers who miss payments a multi-month widow for their loan to be held in administrative forbearance, waving fees for borrowers seeking to change their repayment plan, and allowing borrowers enrolled in income-based repayment plans to self-certify their income and family size.