These proposals include making debt relief paths clearer for borrowers whose colleges closed or lied to them, who have a total and permanent disability, or who have met the public service work commitments through the long-dysfunctional Public Service Loan Forgiveness (PSLF) program.
“We are committed to fixing a broken system,” said U.S. Secretary of Education Dr. Miguel Cardona in a statement on the news. “If a borrower qualifies for student loan relief, it shouldn’t take mountains of paperwork or a law degree to obtain it. Student loan benefits also should not be so hard to get that borrowers never actually benefit from them.”
The Biden-Harris administration has thus far approved almost $26 billion in student debt relief for more than 1.3 million federal student loan borrowers. Many experts and advocates agreed that this latest regulatory package, if approved, would be a large step toward streamlining the often confusing maze of federal student loan discharge programs.
“Overall, these proposed changes are big improvements to current regulations,” said Michelle Dimino, education senior policy advisor at Third Way, a public policy think tank. “The proposals altogether really acknowledge that borrowers should not have to jump through endless hoops to get relief through existing federal student loan forgiveness programs. All the proposed language here is in service of that goal: to make relief clearer for borrowers to navigate.”
One set of proposed regulations known as borrower defense would better help borrowers receive a discharge if their colleges “lied to or took advantage of them,” according to ED’s statement. Such proposals would let borrowers file group claims and get timelier decisions on those claims.
Tight limits on when borrowers could file a claim would also be removed. In addition, the kind of misconduct that a college commits and that could result in a borrower's approved claim would broaden to include “aggressive and deceptive recruitment practices.”
