Blog de Dunlap: An update on where we’re at with student debt cancellation

Danielle, I believe that the Biden administration should use all its tools to provide relief to as many Americans as possible.

That's why I joined my colleagues this week in urging the Secretary of Education to leverage his existing and full authority under the Higher Education Act to strengthen the department's proposed rule for borrowers to receive relief.

Let's back up for a second and review where we're at with student debt cancellation.

Since the far-right Supreme Court struck down President Biden's initial student debt relief plan by claiming that he didn't have the legal authority to cancel student debt (he does), President Biden swiftly implemented two other measures to expedite debt relief for a wide range of borrowers.

One of those steps is launching a process of negotiated rulemaking to pursue debt forgiveness under the Higher Education Act. But Danielle, after taking a look at the draft of the rules emerging from this negotiated rulemaking process, I believe that we could do a lot more.

I've proposed the actions below to strengthen the proposed student debt relief rule. If you agree that the Administration should follow these steps and provide student debt relief for as many borrowers as possible, please add your name here — and let's build strong momentum for these demands.

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While I commend the Biden Administration for making strides in this fight, I believe that their proposal could be strengthened through the following steps:

Eliminate all debt that exceeds the original principal balance of the loan due to runaway interest. Under the current rule, the "Secretary may waive all or a portion of the amount by which a borrower's total outstanding balance exceeds the original principal balance of the loan."
Provide full cancellation, not just a waiver of interest, for those who have repaid enough to cover their original principal. The draft rule doesn't extend relief to borrowers who repaid enough to cover their original principal.
Eliminate the sudden cliff that would give full relief to borrowers whose loans first entered repayment at least 25 years ago, but no relief to other similar borrowers. The proposed rule would extend relief only to borrowers who entered repayment 25 years ago or more by July 1, 2025. However, a borrower who hits the 25-year mark on July 2, 2025 would be ineligible for relief. I believe the Education Department should remove the cutoff date for borrowers who have been in repayment for decades, and instead permit them to become eligible for relief on a rolling basis.
Extend relief to additional categories of borrowers with financial hardship and create a general category for unforeseen forms of hardship. I'm urging the Education Department to expand the income-based indicators of financial hardship, and use some other non-income-based indicators.
Extend relief to borrowers who have been victims of student loan servicer misconduct or error. The current draft text does not include protections for borrowers who have faced predatory loan servicer practices, such as forbearance steering, overcharging, or failing to enroll borrowers who asked to be placed in IDR plans for which they were eligible.
Eliminate the need for borrowers to submit burdensome applications by basing eligibility for relief on information that the Education Department already has or that it can acquire from other agencies. The rule should extend relief to borrowers automatically, without requiring them to submit applications. The Education Department can largely base relief on information already in its possession through payment history databases, Free Application for Federal Student Aid (FAFSA) applications, and on information from other federal agencies.

Danielle, I'm passionate about this. I got my degree from a state school that cost $50 a semester. That opportunity just isn't available today — and tens of millions of Americans are getting crushed by student debt.

If there are opportunities to relieve this burden for them, we need to take them. If you agree, please add your name here to signal your support for these amendments, and let's fight side by side to make this plan as strong as possible.

Thanks for being a part of this,

Elizabeth