Higher Ed Policy Roundup: Vol. 6 - Issue 28

Late last week, the Eighth Circuit Court of Appeals issued a temporary block of the Biden-Harris Administration’s student debt forgiveness plan. This prevents the Education Department (ED) from discharging any student loans until the court rules on an emergency request by six Republican-led states to prevent the policy from going into effect. According to ED, the block does not prevent borrowers from continuing to apply, and the Administration continues to move forward with implementation plans.

On Tuesday, ED announced permanent changes to the Public Service Loan Forgiveness (PSLF) program as part of the income-driven repayment (IDR) payment revision ED teased earlier this year. Recall that, in April, ED announced changes to payment counting for IDR plans which would include:

• Conducting a one-time revision of IDR payments to address past inaccuracies;
• Permanently fixing IDR payment counting by reforming ED’s IDR tracking;
• Conducting a one-time account adjustment to count certain long-term forbearances toward IDR and PSLF forgiveness; and
• Increasing oversight of loan servicers’ forbearance use.

Regarding PSLF, ED will allow updated payment counts credited toward IDR to also count toward PSLF for any months in which the borrower had certified qualifying employment. ED also noted that borrowers with qualifying loans will automatically receive the credit, but borrowers with ineligible loans must consolidate to a Direct Consolidation Loan no later than May 1, 2023 to benefit from the one-time account adjustment.

Additionally, ED will allow borrowers to receive some, but not all, of the benefits that are currently available to those who applied for the Limited PSLF Waiver when ED implements its final PSLF rules in July 2023. Borrowers who submit a PSLF waiver application by the October 31, 2022 deadline will have their time in repayment credited under the Limited PSLF Waiver and will receive the one-time account adjustment applied to their account in July 2023. Borrowers who apply after October 31, 2022 will have their PSLF form assessed under current PSLF rules and may receive an additional credit toward PSLF forgiveness when the one-time account adjustment is applied in July 2023.

Political, legal battle heats up over student loan forgiveness.

Employees at colleges and universities are financially literate but debt constrained to some degree, according to a new report.

There were no relevant student-aid related bills recently introduced for consideration by the 117th Congress (2021-2022).