Higher Ed Policy Roundup: Vol. 7 - Issue 25

On Tuesday, the Education Department (ED) began its Negotiated Rulemaking process to draft regulations relating to the modification, waiver, or compromise of Federal student loans by holding a public hearing. Recall that after the U.S. Supreme Court ruled against the Biden-Harris Administration’s debt forgiveness plan, President Biden announced that his Administration would pursue debt forgiveness using the Higher Education Act. Comments at the public hearing included asking ED to eliminate student debt, making student debt easier to discharge in bankruptcy, and moving quickly through the Negotiated Rulemaking process to address student debt forgiveness prior to the resumption of student loan payments in October.

Late last week, ED announced that 804,000 borrowers will be receiving $39 billion worth of student loan forgiveness in the coming weeks. ED also released state-by-state data on the eligible borrowers. The student loan discharges are a result of ED’s one-time income-driven repayment (IDR) count adjustment, announced in April 2022, intended to compensate for ED’s poor record keeping of IDR payments. Qualifying payments toward the one-time IDR count adjustment will include:

• Any month in which a borrower was in a repayment status, regardless of whether payments were partial or late, the type of loan, or the repayment plan;
• Any period in which a borrower spent 12 or more consecutive months in forbearance;
• Any month in forbearance for borrowers who spent 36 or more cumulative months in forbearance;
• Any month spent in deferment (except for in-school deferment) prior to 2013; and
• Any month spent in economic hardship or military deferments on or after January 1, 2013.

Experts predict that the Biden-Harris Administration's new student loan reforms will take at least a year to implement.

A recent poll by Axios sheds light on who college students and recent graduates blame for student loans not being forgiven.

The following bill(s) have been recently introduced for consideration by the 118th Congress (2023-2024):

H.R. 4616 – The Responsible Borrower Act [Rep. Glenn Grothman (R-WI-6)] would allow higher education institutions to implement guardrails on how much money students can borrow.

H.R. 4635 – The Clean Slate Through Repayment Act [Rep. Deborah Ross (D-NC-2)] would remove records of default from student borrowers’ credit histories once they repay their loans.

H.R. 4742 – [Rep. Lisa McClain (R-MI-9)] would prohibit the Secretary of Education, the Secretary of Treasury, and the Attorney General from canceling student loans or changing any other terms or conditions of student loans without authorization by Congress.