U.S. Department of Education releases draft regulatory text that would provide much-needed debt relief to borrowers across the country
OCTOBER 30, 2023
The Biden-Harris Administration today continued its critical efforts to deliver student debt relief to as many borrowers as possible through negotiated rulemaking under the Higher Education Act by releasing draft regulatory text for specific categories of borrowers and outlining next steps to consider relief options for borrowers experiencing hardship. Forgiveness delivered to borrowers through negotiated rulemaking will build on the historic actions the Biden-Harris Administration has already taken to provide student debt relief to millions of Americans. To date, the Biden-Harris Administration has approved $127 billion in debt relief for nearly 3.6 million borrowers and launched the most affordable student loan repayment plan in history, the SAVE plan.
“President Biden and I are committed to helping borrowers who’ve been failed by our country’s broken and unaffordable student loan system,” said U.S. Secretary of Education Miguel Cardona. “These draft proposals would build on the historic $127 billion in loan forgiveness the Biden-Harris Administration has already approved for nearly 3.6 million borrowers. We are fighting to ensure that student debt does not stand in the way of opportunity or prevent borrowers from realizing the benefits of their higher education.”
The draft regulatory text released today provides negotiators and the public more details as the Department of Education (Department) works toward trying to reach consensus on proposals. The draft regulatory text includes language to provide debt relief for four groups of borrowers, including those who:
- Currently have outstanding federal student loan balances that exceed what they originally borrowed.
- Have loans that first entered repayment 25 or more years ago.
- Took out loans to attend career-training programs that created unreasonable debt loads or provided insufficient earnings for graduates, as well as borrowers who attended institutions with unacceptably high student loan default rates.
- The Secretary determines are eligible for forgiveness under repayment plans like income-driven repayment or targeted relief programs like Public Service Loan Forgiveness or closed school loan discharges except they have not applied for such relief.
The Department also released an issue paper today outlining additional questions and information to guide discussion about a fifth group of borrowers—those who are experiencing financial hardship that the current student loan system does not currently adequately address. The issue paper outlines concepts raised during the first negotiating session that require further development and discussion to identify potential regulatory proposals for the third session or future policymaking efforts. Questions in the paper include which types of borrowers may be experiencing hardship, whether standards used to make improvements to the bankruptcy process could be applied to student debt relief, and what data would be needed to determine whether a borrower is facing hardship. In addition to discussing the draft regulatory text, negotiators will spend the afternoon of the second day of the session discussing the issue of hardship. The session will take place on November 6 and 7 from 10 a.m. to 4 p.m.
The committee is comprised of non-federal negotiators from 16 affected constituency groups, as well as a negotiator from the Department. Negotiators will have an opportunity to discuss the regulatory text and hardship paper over the two days. There will also be up to one hour for public comment each day from 3 p.m. to 4 p.m.
Through this process, the Department will continue to refine regulatory text in advance of the third session December 11 and 12. The public will have an opportunity to submit written comments on the draft rules when they are published next year.
Updates on the student debt relief rulemaking process will be posted here. This includes a transcript and archived video of the first session, which took place October 10 and 11. Members of the public who wish to view the sessions or provide public testimony can also find a link on that page where they can register to do so.
Continuing to provide debt relief and support borrowers
Today’s announcement builds on the work the Biden-Harris Administration has already done to improve the student loan program and make higher education more affordable. This includes approving $127 billion in relief for nearly 3.6 million borrowers, including:
- Nearly $42 billion for almost 855,000 borrowers who are eligible for forgiveness through income-driven repayment by fixing historical inaccuracies in the count of payments that qualify toward forgiveness.
- Almost $51 billion for 715,000 public servants through Public Service Loan Forgiveness (PSLF) programs, including the limited PSLF waiver and Temporary Expanded PSLF (TEPSLF).
- $11.7 billion for almost 513,000 borrowers with a total and permanent disability.
- $22.5 billion for more than 1.3 million borrowers who were cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements.
The Biden-Harris Administration remains committed to making college more affordable and also ensuring student debt is not a roadblock to attaining a college degree or credential and planning for the future. The Administration launched the most affordable student loan repayment plan ever—the SAVE Plan—earlier this year, has made the largest increase to Pell Grants in a decade, and has charted a course to double the maximum Pell Grant and make community college free to enhance college affordability and reduce unnecessary student debt. The Administration is also holding institutions accountable for unaffordable debts and recently proposed regulations that would set standards for graduate earnings and debt outcomes for career programs, while enhancing transparency for all programs to give students the information they need to make informed choices.