Re-entry into a world where student loan payments are the norm has been messy. One borrower got a bill for more than $108,000 – their entire balance, all due at once, according to Education Department records. Some borrowers spent an hour on hold trying to reach the company managing their loans and only about half who called could get through to talk to anyone. Some 2.5 million borrowers either didn’t get their bills with much notice or never got a bill at all. Some student loan borrowers whose balances were forgiven long ago were billed anyway.
Borrowers’ are frustrated. The shock to the economy is still unknown. And according to a survey by the credit reporting agency Transunion, two-thirds of borrowers said they weren’t aware that payments, on hiatus for 3½ years because of the pandemic, were resuming.
And more people are taking out student loans every day, with America’s unpaid debts for college now totaling about $1.7 trillion.
With that as their backdrop, a committee of experts and stakeholders Monday will resume conversations about how to address some borrowers’ debt as part of President ’s plan to address loan forgiveness. It’s his Plan B, following the Supreme Court undoing his original plans for widespread loan cancellation.
The process the Biden administration has turned to is called negotiated rulemaking. It has been used in the past to draft other rules related to higher education, such as those meant to ensure colleges produce graduates whose jobs can cover their student debt.
The negotiators begin their second meeting at 10 a.m. Eastern time and it will be livestreamed with a chance for the public to weigh in. They first met in October.
Here’s what you need to know:
What’s on the agenda?
The official agenda doesn’t give much away, but the Education Department has asked the committee to consider five groups of borrowers in this round of discussion. It’s become clear that while the Biden administration wants to forgive loans widely, there will be limits to what they can do (though any steps they take are expected to face legal challenges). The five groups include borrowers who:
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Have been paying on their loans 25 years or longer;
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Because of interest accruing on their balances, have outstanding federal student loan debt that an amount larger than what they they originally borrowed to attend college;
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Borrowed money to attend career-training programs that created “unreasonable debt loads” or didn’t result in enough income for graduates, or attended colleges that have what the Education Department called “unacceptably high” student loan default rates.
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Are eligible for plans that align payments to income or are eligible for Public Service Loan Forgiveness because of their jobs or closed school loan discharges, but they haven’t applied for these options; and
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Have a financial hardship the student loan system doesn’t already address. One example included people with chronic illnesses that affect borrowers’ ability to work.
Takeaways from the first round of negotiations
It became clear last month, during the first round of negotiating, that the same sort of widespread relief that Biden promised in his initial, failed proposal is unlikely. Instead, on the table are more targeted forms of loan forgiveness.
Biden’s ‘Plan B’ for student loans: Large-scale debt forgiveness likely off the table
One of the negotiators representing the Education Department, policy coordinator Tamy Abernathy, said during the first round that rather than “broad-based debt cancellation,” the point of the negotiating process is to consider how the secretary can “exercise the authority to grant waivers” in individual ways.
Some other takeaways from last month’s discussions:
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Parent PLUS loans came up often, as did other programs often exempt from benefits like income-driven repayment;
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There were new questions about how to measure the value of some college programs;
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The definition of “hardship” is getting a new look; and
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Any new recommendations will only make a difference if they can stand up to legal challenges.
Who is on the committee
The committee has 16 members and 16 alternates, and federal facilitators help run the meetings. They negotiators come from all sides of the student loan debate, from servicers to borrowers. Private, public and for-profit colleges are represented, as are historically black colleges and universities, or HBCUs, plus tribal colleges and other forms of minority-serving institutions. Find a full list of the negotiators at this link.
How to watch student loan negotiated rulemaking
The meetings will be streamed online but require registering at this link to be able to watch. The meetings are scheduled for Monday and Tuesday from 10 a.m. to noon, then 1 p.m. to 4 p.m. Eastern time, each day.
An hour each day will be set aside for public comment. To request time to comment, send the name of the speaker, as well as the name of the organization, if applicable, to [email protected] no later than noon Eastern time on the day of the meeting you wish to speak.
Input also can be offered later in the process when the negotiating committee or the Education Department crafts a plan for loan forgiveness.
How does the ‘neg reg’ process for student loan forgiveness work?
The negotiators have to come up with a plan to which every member of the committee agrees. If they don’t arrive at a consensus, the Education Department can write its own proposal. Either way, there will be another opportunity for the public to comment on what is developed before it’s finalized. Congress will then have the opportunity to review the rule, and has the option of passing a joint resolution to overturn it.
MOHELA made borrowers delinquent. Now the student loan servicer is being penalized
A final rule must be published by Nov. 1 for it to go into effect in July of the following year. This rulemaking schedule is a big reason the Biden administration is so intent on publishing a rule developed under its Education Department. Still, it could be more than a year before any plan the committee crafts becomes reality.
When the Supreme Court struck down Biden’s original plan this past summer, it ruled student loan debt relief could not happen through the president’s executive authorities the way he’d hoped. That means the only viable routes are through Congressional legislation – which given partisan gridlock is all but impossible – or federal higher education policy changes, aka “neg reg. “
If a rule isn’t finalized through this neg reg series and a Republican wins next year’s presidential election, the chances of broad student loan forgiveness becoming reality are even slimmer.
When are the other student loan relief meetings?
The second series of meetings will take place Monday and Tuesday. (The first was in October. Catch up with documents and recordings you’ll find on this page.) The third, and scheduled to be final, gathering is Dec. 11-12. That session also will be virtual and include opportunities for the public to comment.
This article originally appeared on USA TODAY: Student loan debt forgiveness committee meets on Biden’s proposals
Amanda Smith is a dedicated U.S. correspondent with a passion for uncovering the stories that shape the nation. With a background in political science, she provides in-depth analysis and insightful commentary on domestic affairs, ensuring readers are well-informed about the latest developments across the United States.
