Higher Ed Policy Roundup: Vol. 6 - Issue 3

The U.S. Department of Education (ED) announced on Tuesday changes to payment counting for income-driven repayment (IDR) plans. Changes 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.

ED estimates that as a result of these improvements, 40,000 borrowers will receive immediate loan forgiveness and 3.6 million borrowers will move closer to forgiveness. The changes are being made to “address historical failures in the administration of the federal student loan program and support student loan borrowers through the pandemic.”  

On Wednesday, the Government Accountability Office (GAO) released a report that found implementation challenges with the IDR program that has resulted in undercounting the number of borrowers eligible for forgiveness. GAO states that ED “has had trouble tracking borrowers' payments and hasn't done enough to ensure that all eligible borrowers receive the forgiveness to which they are entitled.” In the report, GAO makes five recommendations, including that ED take steps to identify and address payment tracking errors, and ensure borrowers receive additional information about requirements for forgiveness and counts of qualifying payments.

A new Consumer Financial Protection Bureau blog post aims to bust myths about bankruptcy and private student loans.

New York Times podcast The Daily discusses the current political landscape related to student loans in an episode titled “Biden’s Student Loan Dilemma.”

The following bill has been recently introduced for consideration by the 116th Congress (2019-2020):

H.R. 7530 – Student Loan Borrower Relief Act [Rep. Frederica Wilson (D-FL-24)] improves and streamlines multiple IDR plans. This includes lowering the forgiveness eligibility threshold from 25 to 15 years for Income-Contingent Repayment plans, as well as other protections for borrowers related to interest accrual and capitalization resulting from certain plans.