The Biden-Harris Administration today 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 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 today with its committee of non-Federal negotiators 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 released today 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:

1. Borrowers whose balances are greater than what they owed 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. Multiple proposals would provide even more interest relief to lower-income borrowers and to borrowers enrolled in SAVE.
2. Borrowers whose loans first entered repayment many years ago. The Department updated this proposed text to provide one-time relief 20 years after entering repayment for borrowers with only undergraduate loans. All other borrowers would receive forgiveness on loans that entered repayment 25 years ago, the same timeline as proposed by the Department at the second session.
3. Borrowers who are eligible for forgiveness under income-driven repayment plans or discharge opportunities such as Public Service Loan Forgiveness but have not yet applied for such relief. The proposal would provide borrowers with the benefits they have earned. The Department simplified this language from the prior session.
4. Borrowers who attended programs or institutions that failed to deliver sufficient financial value. This policy would provide relief to borrowers who are left repaying loans where the Department has taken action to terminate future borrowing at an institution or program because the institution or program is leaving students with unaffordable debts, or where such actions are cut off by closure.  The Department clarified and expanded this proposed language from the prior session. In addition to including situations where a program or institution failed accountability measures based on their cohort default rates or debt-to-earnings rates, the Department is proposing to include situations where institutions or programs lose access to Federal aid due to actions that financially harm students, such as misconduct affecting student eligibility. This would also apply to programs or institutions that close prior to the finalization of such efforts or determinations. 

Next week, the Department and the non-Federal negotiators will discuss these ideas. At the end of the two-day session the committee will determine whether it is able to reach consensus on each of these ideas individually. Consensus means there is no dissent on a given idea. Following this meeting the Department will work on draft rules that will be released for public comment next year. The Department will use any regulatory text that reaches consensus in its draft rules. 

While the Department is not providing proposed regulatory text related to defining hardship for borrowers, the Department will consider ways to pursue relief for this category of borrowers and has dedicated time to address this issue during the December session.  

A copy of the proposed regulatory text is available here. Updates on the student debt relief rulemaking process will be posted here. This includes transcripts and archived videos of the first and second sessions, which took place in October and November. Members of the public who wish to view the upcoming session or provide public testimony can also find a link on that page where they can register to do so. There will only be public comment on the first day. 

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 a total of $127 billion in relief for nearly 3.6 million borrowers, through a variety of actions, including: 

• Nearly $42 billion for almost 855,000 borrowers who are eligible for forgiveness through IDR 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 issued final regulations that 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.