After the Supreme Court struck down President Joe Biden’s initial attempt to cancel student loans using the HEROES Act of 2003, the Education Department is now exploring an alternative route through the Higher Education Act of 1965 to provide broad student-debt relief to borrowers.
The Higher Education Act allows the Education Department to enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand related to federal student debt.
Exploring the Higher Education Act for Broad Student Loan Forgiveness
However, utilizing this law requires the Biden administration to go through a specific negotiated-rulemaking process.
This process involves posting the proposed policy on the Federal Register for public comment, followed by a public hearing and negotiations with stakeholders and experts to reach a consensus on the regulation.
Historically, this process has taken a considerable amount of time, with the fastest negotiated-rulemaking process for higher-education reforms under the Biden administration taking around 15 months.
As the timeline for the new plan for student-debt relief remains uncertain, Education Department officials have expressed their commitment to work as quickly as possible within the legal framework to assist borrowers.
Under Secretary of Education James Kvaal emphasized the department’s dedication to help borrowers who have struggled with mounting student debt, promising to assist as many borrowers as possible.
The Tuesday public hearing allowed department officials to hear input from borrowers, advocates, and experts on shaping the proposed debt relief plan.
The next step involves the department selecting negotiators, who will participate in three sessions at monthly intervals.
The number of sessions may vary depending on the negotiations.
For the negotiated rule to be finalized, every committee member must agree with the final proposal.
Following the consensus, the rule will be published on the Federal Register again for public comment before its official implementation.
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Biden Administration’s Measures to Aid Borrowers Amid Uncertainties
While the department strives to facilitate the return to repayment for borrowers beginning in October, with interest accruing from September, it plans to implement a 12-month on-ramp period to prevent reporting missed payments to credit agencies.
Additionally, a new income-driven repayment plan will be introduced to lower borrowers’ monthly payments during this process.
Despite uncertainties and potential litigation, the Biden administration remains committed to finding an effective pathway to address student-debt relief and fulfill its promise to help borrowers struggling under the burden of federal student loans.
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