Details unclear on Biden’s student loan relief priorities
- Biden’s regulatory program, released Friday, includes proposals for student loan forgiveness.
- The Education Department plans to improve loan cancellation programs by 2022, but details are vague.
- Democrats and borrowers continue to push for immediate debt relief while Biden is reluctant.
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From tackling the climate crisis to strengthening protections against racial discrimination, President Joe Biden’s regulatory agenda released on Friday covers a lot of ground. Significantly, contrary to his budget, he even mentions the forgiveness of the student loan. But for borrowers awaiting clarification on what will happen to their debt, details are scarce.
the listing Regulatory Actions, typically released twice a year, describes how Biden plans to move his agenda forward in each federal agency.
According to the Education Department page, Biden’s agenda includes “improve student loan cancellation powers“in which Education Secretary Miguel Cardona” will amend regulations to improve borrower eligibility, requirements and application processes “for borrowers who meet loan cancellation criteria, such as being totally and permanently disabled , or attend a recently closed school.
The ministry also said it see again the Public Service Loan Remission Program (PSLF) and “plans to review these regulations for improvements”, as well as amendment the “borrower’s repayment defense,” which forgives student loans that have been scammed by for-profit schools.
The ministry plans to finalize the rules by April 2022.
“The past four years have offered a clear lesson in what happens when the executive fails to live up to its responsibility to protect the American people,” said Sharon Block, Acting Administrator of the White House Regulatory Office, in a statement. “Our first regulatory program demonstrates our commitment to reverse this trend. “
At the end of May, the education ministry announced that it was beginning the process of issuing new regulations on higher education, and Friday’s list confirmed those plans. But no further details were provided on what the mentioned improvements would look like.
This could be because the department is in the early stages of rule making. The first step in the process will be to hold hearings in June to receive feedback on the student loan waiver programs. it could take a year or more until the changes are implemented.
But borrowers and lawmakers are increasingly frustrated with the timeline for granting student loan forgiveness to eligible borrowers.
Biden campaign on the reform of the PSLF, which allows government and nonprofit employees on federally guaranteed student loans to request a loan forgiveness after proof of 120 monthly payments under a qualifying repayment plan.
However, loopholes in the program have existed for years. 98% of borrowers were rejected from the program, prompting 56 Democrats to urge Cardona to correct the program in early May, and Education Secretary Betsy DeVos was taken to court several times on the program’s high refusal rate.
Borrowers have had similar problems with defending the borrower against repayment. Over the past decade, several for-profit schools have closed their doors following investigations claiming schools were engaging in fraudulent behavior related to federal loans, which led President Barack Obama to establish the program. student debt cancellation for eligible fraudulent borrowers.
Under Obama, the program had an approval rating of 99.2%, but when DeVos took over, 99.4% of eligible borrowers were denied the program, and she will soon testify as to why that happened. is produced.
So while the ministry’s plans to review these programs hold promise for borrowers, the specific details are unclear. That’s why Massachusetts Senator Elizabeth Warren and other Democrats are asking Biden to write off $ 50,000 in student debt per borrower in order to provide immediate relief.
“The time is right,” Warren told Insider on Tuesday. “We know what the problem is: Student loan debt is holding tens of millions of people across this country. People who can’t buy a house, people who can’t buy cars, people who can’t start small businesses. We need to write off this student loan debt, not just for these individuals individually, but for our entire economy. “
The education department did not immediately respond to Insider’s request for comment.