December 8, 2023

Higher Ed Policy Roundup: Vol. 7 - Issue 40

Policy and Advocacy

This Week in Washington

On Wednesday, the Biden-Harris Administration announced another tranche of student debt forgiveness totaling $4.8 billion. This set of forgiveness comes as a result of changes to the Public Service Loan Forgiveness program and relief provided to borrowers who were still in student loan debt after 20 or 25 years of repayment. The administration stated that the new measure is expected to impact over 80,000 borrowers.

On Monday, the Education Department (ED) released an updated draft of its proposed regulatory text for its final negotiated rulemaking session regarding student loan forgiveness slated to take place on December 11-12. 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 through the negotiated rulemaking process using the Higher Education Act. Included in the updated text are proposals to establish a "waiver and compromise" authority under the Higher Education Act, cancel up to $10,000 of the debt of borrowers whose balances exceed the original principal balance, and cancel up to $20,000 of the debt of borrowers whose income is below 225 percent of the federal poverty level.

Additionally, ED made data on student loan defaults pre-pandemic public because of a request for the information from members of the rulemaking committee on student loan forgiveness. The data revealed that the highest defaulters in September 2021 were Pell Grant recipients at 67 percent, and borrowers who had not completed their academic program at 62 percent.

News You Can Use

The Education Finance Council published a research brief on the downsides of the Direct PLUS Loan program, examining trends in borrowing and repayment.

Some higher education institutions are beginning to outsource financial aid services due to staffing issues.

Over 500 higher education institutions have joined the College Transparency Initiative, a task force dedicated to developing common principles and standards for financial aid offer letters.

Recent Legislation

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

H.R. 6593Codifying SAVE Plan Act [Rep. Daniel Goldman (D-NY-10)] would codify the Biden-Harris Administration’s new income-driven repayment plan into law, protecting this new policy from future presidential administrations.

S. 3404The Student Loan Borrower Bill of Rights Act [Sen. Richard Durbin (D-IL)] would create consistent servicing and disclosure standards across private and federal student loans and allow the Secretary of Education to adjust those standards for federal servicers through regulation to benefit federal student loan borrowers.