The paper notes that, when deciding whether to collect on debt, some other federal agencies consider whether it “would be against equity and good conscience,” or if it would “impose financial hardship.”Īt a White House briefing last week, Biden drew attention to the problem of ballooning interest. It also asks negotiators to discuss the types of factors that would merit loan cancellation. Those who face hardships “that the current student loan system does not adequately address." Borrowers with older loans taken out before Congress created benefits meant to ease the burden of student debt Those who borrowed loans to attend college programs that didn’t lead to jobs with enough earnings to repay their loans Those who are eligible for loan cancellation under existing income-driven repayment plans but have not applied for those programs Borrowers whose interest grows so much that their balances exceed what they initially owed Negotiators are being asked how the agency should help: It offers few clues on the department’s vision for loan cancellation, but it identifies five groups of borrowers who may be in need of relief. The court concluded that the education secretary has power “to make modest adjustments and additions to existing provisions, not transform them.”Īs a starting point for negotiators, the Education Department published an issue paper outlining some of the primary questions that will be up for debate. Some legal analysts see the court's decision as a rejection of any mass cancellation without action from Congress. He also noted that the court’s ruling “will have to factor in to the steps we take moving forward.” In a recent interview with The Associated Press, he said he’s working “as quickly as possible.” The administration plans to finalize the new rule sometime next year, but Education Secretary Miguel Cardona has declined to say if it will be in place before next fall’s presidential election. Republicans rallied against the cancellation, saying it would add an unfair benefit for college graduates at the expense of taxpayers who didn't attend college. That plan would have canceled up to $20,000 in federal student loans for borrowers with incomes below $125,000 or couples below $250,000. It can be a long and painstaking process, and it often finishes without consensus among negotiators.īiden has called for a new plan to help “as many borrowers as possible,” but it’s unclear whether it will be as expansive as his first proposal. The Education Department routinely uses negotiated rulemaking to enact federal regulation, and it’s required for any regulation related to student financial aid.
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