December 4, 2023–The Biden-Harris Administration took another step in its continued efforts to provide financial relief to significant numbers of student loan borrowers with the release of an updated copy of the proposed regulatory text. The proposals build on the Biden-Harris Administration’s actions to date to provide student loan borrowers with much-needed breathing room. Already, the Administration has approved a total of $127 billion in student debt relief for 3.6 million borrowers through a variety of actions.
The U.S. Department of Education (Department) will discuss the proposed text released with its committee of non-Federal negotiators on December 11 and 12. This meeting is the next required public step before the Department is able to start working on draft rules, which will be released for public comment next year. In addition, the Department continues to consider relief options for borrowers experiencing financial hardship that the current loan system does not address and will be dedicating time to this topic in the upcoming negotiating session.
“The Biden-Harris Administration has already secured a total of $127 billion in debt relief for 3.6 million borrowers through a variety of actions, but we know there are so many hardworking Americans and families out there who still need help,” said U.S. Secretary of Education Miguel Cardona. “Student loans are supposed to be a bridge to a better life, not a life sentence of endless debt. This rulemaking process is about standing up for borrowers who’ve been failed by the country’s broken student loan system and creating new regulations that will reduce the burden of student debt in this country.”
The proposed regulatory text provides more information on ideas discussed in early November around separate types of debt relief. The updated text reflects suggestions from negotiators and continued review by the Department. The text proposes to provide relief in the following circumstances:
Borrowers whose balances are greater than what they owe upon entering repayment. Many borrowers see interest charges grow faster than they can make payments. The Department has addressed these problems going forward through the Saving on a Valuable Education (SAVE) plan and new policies limiting interest capitalization. One of the Department’s proposals would provide up to $10,000 of relief to all borrowers who have experienced balance growth due to interest. Two additional proposals would provide even more interest relief to lower-income borrowers and to borrowers enrolled in SAVE.
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