New debt cancellation for borrowers enrolled in SAVE, other Income-Driven Repayment plans, and Public Service Loan Forgiveness comes on the heels of President Biden announcing new plans that could benefit tens of millions of Americans.This latest round of debt cancellation means that $153 billion in student debt relief has been provided for 4.3 million Americans. New plans announced by Biden would cancel student debt for over 30 million when implemented.These state-by-state fact sheets have been provided by the White House:
President Biden announced that 277,000 more Americans will get their student debt canceled, bringing the total debt relief approved by the Biden-Harris Administration to $153 billion for 4.3 million Americans through various actions. This latest round of debt cancellation comes on the heels of President Biden announcing new plans that, if implemented, would cancel student debt for over 30 million Americans when combined with actions the Administration has taken over the last three years. These announcements reinforce the President’s commitment to using every path available to deliver student debt relief to as many borrowers as possible through various actions.
The 277,000 Americans receiving this latest round of debt relief are borrowers enrolled in the SAVE Plan, other borrowers enrolled in Income-Driven Repayment plans, and borrowers receiving Public Service Loan Forgiveness. The Biden-Harris Administration fixed Income-Driven Repayment (IDR) and launched the SAVE Plan last year – the most affordable repayment plan ever. Already 8 million borrowers are enrolled in SAVE, 4.5 million of those borrowers have a monthly payment of $0, and over 1 million additional borrowers have a monthly payment of less than $100. And if borrowers took out low balances of loans, the SAVE Plan puts them on a faster path to debt relief after at least ten years of payments.
Since President Biden took office, his Administration has approved over $54 billion in debt cancellation for 1.3 million borrowers enrolled in income-driven repayment plans, including the new SAVE Plan. This builds on additional actions the Biden-Harris Administration has taken to cancel debt for nearly 900,000 public service workers, 1.3 million borrowers cheated by their schools or borrowers covered by related court settlements, and nearly 550,000 borrowers with a total and permanent disability, including many veterans.
While the Administration continues to cancel Americans’ student debt through improving existing forgiveness programs and through the SAVE Plan, the Biden-Harris Administration is also pursuing new plans that, if implemented, would cancel student debt for tens of millions more. Earlier this week, the President announced his Administration’s alternative path to debt cancellation in the wake of last year’s Supreme Court decision. Learn more about these plans at StudentAid.gov/DebtRelief.
The Biden-Harris Administration believes that education beyond high school should unlock doors to opportunity, not leave borrowers stranded with debt they cannot afford. That’s why, from day one, President Biden and Vice President Harris have been working to fix the broken student loan system and make college more affordable. Today, the Biden-Harris Administration announced the official launch of the most affordable repayment plan ever created – the Saving on a Valuable Education (SAVE) plan and kicked off an outreach campaign to encourage eligible borrowers to sign up for the plan.
“On Day One of my Administration, I promised to fix the problems of the existing student loan program that hurt borrowers for much too long. And I’m proud we’re keeping that promise,” President Biden declared. “We’ve already approved over $116 billion in debt cancellation for 3.4 million Americans, no matter how many lawsuits, challenges, or roadblocks Republican elected officials or special interests tried to put in our way. And today I’m proud to announce a new program called the SAVE Plan. It’s the most affordable student loan plan ever.”
The SAVE plan is an income-driven repayment (IDR) plan that calculates payments based on a borrower’s income and family size – not their loan balance – and forgives remaining balances after a certain number of years. The SAVE plan will cut many borrowers’ monthly payments to zero, will save other borrowers around $1,000 per year, will prevent balances from growing because of unpaid interest, and will get more borrowers closer to forgiveness faster. The SAVE plan builds on the actions the Biden-Harris Administration has already taken to support students and borrowers, including cancelling more than $116 billion in student loan debt for 3.4 million Americans.
The Biden-Harris Administration estimates that over 20 million borrowers could benefit from the SAVE plan. Borrowers can sign up today by visiting StudentAid.gov/SAVE
Specifically, the SAVE plan will:
Cut payments on undergraduate loans in half. Borrowers with undergraduate loans will have their payments reduced from 10% to 5% of their discretionary income. Those who have undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income based upon the original principal balances of their loans.
Bring many borrowers’ loan payments to $0 per month.A borrower’s monthly payment amount is based on their discretionary income—defined under the SAVE plan as the difference between their adjusted gross income (AGI) and 225% of the U.S. Department of Health and Human Services Poverty Guideline amount for their family size. This means a single borrower who makes about $15 an hour will not have to make any monthly payments. Borrowers earning above that amount would save around $1,000 a year on their payments compared to other IDR plans. The Department of Education estimates that more than 1 million additional low-income borrowers will qualify for a $0 payment. This will allow them to focus on food, rent, and other basic needs instead of loan payments.
Ensure that borrowers never see their balance grow as long as they keep up with their required payments. The Department of Education will stop charging any monthly interest not covered by the borrower’s payment on the SAVE plan. As a result, borrowers who pay what they owe on this plan will no longer see their loans grow due to unpaid interest. For example, if a borrower has $50 in interest that accumulates each month and their payment is $30 per month under the new SAVE plan, the remaining $20 would not be charged as long as they make their $30 monthly payment. The Department of Education estimates that 70 percent of borrowers who were on an IDR plan before the payment pause would stand to benefit from this change. Coinciding with the launch of the SAVE plan, the White House Council of Economic Advisers released a new blog post that models how the income benefit of the SAVE plan could prevent a lower-income borrowers’ balance from increasing by nearly 78% over a 20-year repayment period.
Provide early forgiveness for low-balance borrowers. IDR plans require all borrowers, even those who only attended school for a single term, to repay their loans for at least 20 or 25 years before receiving forgiveness of any outstanding balance. Under the SAVE plan, borrowers whose original principal balances were $12,000 or less will receive forgiveness after 120 payments (the equivalent of 10 years in repayment). For each additional $1,000 borrowed above that level, the plan adds an additional 12 payments (equivalent of 1 year of payments) for up to a maximum of 20 or 25 years. For example, if a borrower’s original principal balance is $14,000, they will see forgiveness after 12 years. Payments made previously (before 2024) and those made going forward will count toward these maximum forgiveness timeframes.
The benefits of the SAVE plan will be particularly critical for low- and middle-income borrowers, community college students, and borrowers who work in public service. Overall, the Department of Education estimates that the plan will have the following effects for future cohorts of borrowers compared to the IDR plan, called the Revised Pay-As-You-Earn (REPAYE) plan:
Borrowers will see their total payments per dollar borrowed fall by 40%. Borrowers with the lowest projected lifetime earnings will see payments per dollar borrowed fall by 83%, while those in the top would only see a 5% reduction.
A typical graduate of a four-year public university will save nearly $2,000 a year.
A first-year teacher with a bachelor’s degree will see a two-third reduction in total payments, saving more than $17,000, while pursuing Public Service Loan Forgiveness.
85% of community college borrowers will be debt-free within 10 years because of the early forgiveness for low-balance borrowers provision of the plan.
On average, Black, Hispanic, American Indian and Alaska Native borrowers will see their total lifetime payments per dollar borrowed cut in half.
Borrowers who are already on the REPAYE plan will be automatically enrolled in the SAVE plan and see their payments automatically adjust with no action on their part.
Department of Education Launches Outreach Campaign
To encourage borrowers to sign up for the new SAVE plan, the Department of Education is partnering with grassroots organizations to launch an outreach campaign, “SAVE on Student Debt”. The campaign will leverage strategic partnerships across public, private, and nonprofit sectors to help borrowers take full advantage of the benefits provided by the SAVE plan, as well as ensure borrowers know about other resources and debt forgiveness programs available from the Department. This partnership will be led by the Department in collaboration with Civic Nation, the National Association for the Advancement of Colored People (NAACP), the National Urban League (NUL), Rise, the Student Debt Crisis Center, UnidosUS, and Young Invincibles.
The outreach campaign will build on the direct outreach underway by the Department of Education and Federal Student Aid to ensure borrowers know about the SAVE plan and other programs to help them access debt relief. In the coming days, the Department will contact nearly 30 million borrowers to invite them to apply for the SAVE plan. The direct-to-borrower communication will highlight how the new IDR application takes less than 10 minutes to fill out. The “SAVE on Student Debt” campaign and direct-to-borrower communications will also focus on enrolling borrowers into SAVE who will benefit the most from the plan but are often hardest to reach. Importantly, the new SAVE plan lowers barriers that previously stood in the way of higher enrollment rates of other IDR plans by streamlining repayment options, automatically enrolling delinquent borrowers who have given consent to access their tax information into the plan, and eliminating the need to manually recertify their income each year. This is part of the Department’s broader improvements to the student loan system and robust outreach campaign to support borrowers when the payment pause ends this fall.
Broader Efforts to Deliver Relief to Student Loan Borrowers
The SAVE plan builds on broader actions by the Biden-Harris Administration to deliver relief to student loan borrowers, fix problems in the student loan system, and make college more affordable. To date, the Biden-Harris Administration has cancelled more than $116 billion in student loan debt for 3.4 million Americans, including:
$39 billion for 804,000 borrowers as a result of fixes to IDR plans who have been in repayment for over 20 years but never got the relief they deserved
$45.7 billion for 662,000 public service workers
$10.5 billion for 491,000 borrowers who have a total and permanent disability; and
$22 billion for nearly 1.3 million borrowers who were cheated by their schools, saw their schools precipitously close, or are covered by related court settlements.
The Administration has also achieved the largest increases in Pell Grants in over a decade to help families who earn less than roughly $60,000 per year; fixed the Public Service Loan Forgiveness program so borrowers who go into public service get the debt relief they are entitled to; is holding colleges accountable for leaving students with mountains of debt and without good job prospects; and announced that it is pursuing an alternative path to deliver debt relief to as many student loan borrowers as possible, as quickly as possible in the wake of the Supreme Court’s decision on the Administration’s student debt relief plan.
No President has fought harder for student debt relief than President Biden, and he’s not done yet. “President Biden will not let Republican elected officials succeed in denying hardworking Americans the relief they need,” the White House stated. Biden gets it. He understands how lives are being upended, derailed, ambitions curtailed, because of crippling student loan debt that, as a reminder, is the ONLY DEBT that cannot be erased through bankruptcy. Think about it, how many Republican Congressmembers took advantage of COVID relief loan forgiveness, intended to help employers retain workers, but can’t find a way of making the loan obligation fair, when interest rates for others were at near zero. If they don’t allow forgiveness of the entire loan, they should get rid of the onerous, unjustified interest that is compounding, and provide a fair means to repay the principle.
For so many, a college degree has been their ticket into the middle class, home ownership, a legacy for their children, and a means of finally ending the cycle of poverty. College tuition has been increasing an ungodly rates, two and three times the cost of living – because the colleges can – which is why the balances for loan repayment are so high. Biden sought to address the injustice and the imbalance by giving student borrowers the same advantage he gave businesses to stay afloat and prevent the economic hardship of the historic pandemic from becoming a Greater Great Depression.
Here is a fact sheet of new actions Biden is taking to provide debt relief and support for student loan borrowers –Karen Rubin/news-photos-features.com
In light of the Supreme Court’s ruling this morning, President Biden and his Administration have already taken twostepsthis afternoon aimed at providing debt relief for as many borrowers as possible, as fast as possible, and supporting student loan borrowers:
The Secretary of Education initiated a rulemaking process aimed at opening an alternative path to debt relief for as many working and middle-class borrowers as possible, using the Secretary’s authority under the Higher Education Act.
The Department of Education (Department) finalized the most affordable repayment plan ever created, ensuring that borrowers will be able to take advantage of this plan this summer—before loan payments are due. This plan helps the typical borrower save more than $1,000 a year.
In addition, to protect the most vulnerable borrowers from the worst consequences of missed payments following the payment restart, the Department is instituting a 12-month “on-ramp” to repayment, running from October 1, 2023 to September 30, 2024, so that financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.
These actions reflect the President’s belief that an education beyond high school should be a ticket to the middle class. It also builds on the unprecedented steps President Biden and his Administration have taken to make college more affordable for working and middle-class families and make federal student loans more manageable. The Biden-Harris Administration has:
Secured the largest increases to Pell Grants in a decade.
Fixed broken student loan programs such as Public Service Loan Forgiveness, so borrowers actually get the relief they deserve.
Approved more than $66 billion in loan cancellation for 2.2 million borrowers across the country, including public service workers and those who have been defrauded by their colleges.
Debt Relief for As Many Borrowers as Possible, as Fast as Possible
The President remains committed to providing relief to low- and middle-income borrowers. For too many Americans, a ticket to the middle-class remains out of reach because of unmanageable student loan debt. COVID-19 exacerbated that challenge – risking tens of millions of borrowers’ financial security and futures because of the economic harms brought on by a once-in-a-century pandemic.
Today, the Department initiated rulemaking aimed at opening an alternative path to debt relief for as many borrowers as possible, using the Secretary of Education’s authority under the Higher Education Act. The Department issued a notice, which is the first step in the process of issuing new regulations under this so-called “negotiated rulemaking” process. The notice announces a virtual public hearing on July 18th and solicits written comments from stakeholders on topics to consider.
Following the public hearing, the Department will finalize the issues to be addressed through rulemaking and begin the negotiated rulemaking sessions this fall. The Department will complete this rulemaking as quickly as possible.
Lowering Monthly Payments
The Biden-Harris Administration today also finalized the most affordable repayment plan ever created, called the Saving on a Valuable Education (SAVE) plan. This income-driven repayment plan will cut borrowers’ monthly payments in half, help the typical borrower save more than $1,000 per year on payments, allow many borrowers to make $0 monthly payments, and ensure borrowers don’t see their balances grow from unpaid interest.
Specifically, the plan will:
For undergraduate loans, cut in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income.
Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment under this plan.
Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less. The Department estimates that this reform will allow nearly all community college borrowers to be debt-free within 10 years.
Not charge borrowers with unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
All student borrowers in repayment will be eligible to enroll in the SAVE plan. They will be able to enroll later this summer, before any monthly payments are due. Borrowers who sign up or are already signed up for the current Revised Pay as You Earn (REPAYE) plan will be automatically enrolled in SAVE once the new plan is implemented. To learn more about the new SAVE plan, visit the Department of Education’s website.
Ensuring Support for Borrowers Most at Risk
To protect the most vulnerable borrowers, the Department is creating a temporary “on-ramp” to protect borrowers from the harshest consequences of late, missed, or partial payments for up to 12 months. While payments will be due and interest will accrue during this period, interest will not capitalize at the end of the on-ramp period. Additionally, borrowers will not be reported to credit bureaus, be considered in default, or referred to collection agencies for late, missed, or partial payments during the on-ramp period. Future monthly bills for borrowers not enrolled in an income-driven repayment plan will be automatically adjusted to reflect the accrued interest during those months.
Borrowers who can pay should do so, but this on-ramp period gives borrowers who cannot make payments right away the necessary time to adjust, enabling them to ultimately make their monthly payments and meet their financial obligations on their loans. Borrowers do not need to take any action to qualify for this on-ramp.
Despite ongoing opposition by Republicans, President Joe Biden continues to introduce programs to relieve the burden of student loans. This is a fact sheet from the Department of Education describing a Revised Pay As You Earn (REPAYE) plan to provide student debt relief for 40 million borrowers:
Today, the U.S. Department of Education (Department) proposed regulations to reduce the cost of federal student loan payments, especially for low and middle-income borrowers. The regulations fulfill the commitment President Biden laid out in August when he announced his Administration’s plan to provide student debt relief for approximately 40 million borrowers and make the student loan system more manageable for student borrowers. The proposed regulations would create the most affordable income-driven repayment (IDR) plan that has ever been made available to student loan borrowers, simplify the program, and eliminate common pitfalls that have historically delayed borrowers’ progress toward forgiveness.
“Today the Biden-Harris administration is proposing historic changes that would make student loan repayment more affordable and manageable than ever before,” said U.S. Secretary of Education Miguel Cardona. “We cannot return to the same broken system we had before the pandemic, when a million borrowers defaulted on their loans a year and snowballing interest left millions owing more than they initially borrowed. These proposed regulations will cut monthly payments for undergraduate borrowers in half and create faster pathways to forgiveness, so borrowers can better manage repayment, avoid delinquency and default, and focus on building brighter futures for themselves and their families.”
The proposed regulations would amend the terms of the Revised Pay As You Earn (REPAYE) plan to offer $0 monthly payments for any individual borrower who makes less than roughly $30,600 annually and any borrower in a family of four who makes less than about $62,400. The regulations would also cut in half monthly payments on undergraduate loans for borrowers who do not otherwise have a $0 payment in this plan. The proposed regulations would also ensure that borrowers stop seeing their balances grow due to the accumulation of unpaid interest after making their monthly payments.
While these regulations would provide critical relief to student borrowers, the Biden-Harris Administration is also committed to ensuring postsecondary institutions and programs are held accountable if they leave borrowers with unaffordable debts. The Department is currently working on a proposed gainful employment regulation that would cut off federal financial aid to career training programs that fail to provide sufficient financial value and require warnings for borrowers who attend any program that leaves graduates with excessive debts. The same regulatory package will also include proposals to strengthen the conditions that can be placed on institutions that fail to meet the requirements of the Higher Education Act or exhibit signs of risk.
The Department is also taking steps today to carry out President Biden’s announcement from August that the Department would publish a list of the programs at all types of colleges and universities that provide the least financial value to students. To advance this effort, the Department is publishing a request for information to seek formal public feedback on the best way to identify the programs that provide the least financial value for students. This public comment process will ensure the Department is carefully considering a range of perspectives and considerations as it constructs the list. Once the list is published, institutions with programs on this list will be asked to submit improvement plans to the Department to improve their financial value.
Estimated effects of the proposed IDR Plan
The proposed regulatory changes would substantially reduce monthly debt burdens and lifetime payments, especially for low and middle-income borrowers, community college students, and borrowers who work in public service. Overall, the Department estimates that the plan would have the following effects compared to the existing REPAYE plan:
Future cohorts of borrowers would see their total payments per dollar borrowed decrease by 40%. Borrowers with the lowest projected lifetime earnings would see payments that are 83% less, while those in the top would only see a 5% reduction.
A typical graduate of a four-year public university would save nearly $2,000 a year relative to the current REPAYE plan.
A first-year teacher with a bachelor’s degree would save more than $17,000 in total payments while pursuing Public Service Loan Forgiveness—a two-thirds reduction in what they would pay in total under REPAYE.
85% of community college borrowers would be debt-free within 10 years
On average, Black, Hispanic, American Indian and Alaska Native borrowers would see their lifetime payments per dollar borrowed cut in half.
Building on an Unparalleled Record of Debt Relief
The draft regulations build upon the work the Biden-Harris Administration has already done to improve the student loan program, make colleges more affordable, approve $48 billion in targeted relief to nearly 2 million student loan borrowers, and fight to provide up to $20,000 in one-time debt relief to over 40 million eligible borrowers, including 26 million who have already applied. These regulations also propose to build on the Administration’s commitment to ensuring IDR plans deliver relief to eligible borrowers. This includes ongoing steps to provide accurate counts of progress toward forgiveness for borrowers through a one-time account adjustment.
The proposed regulations and request for information will be published in the Federal Register tomorrow. The public may comment on both documents through the Regulations.gov website for 30 days. The Department expects to finalize the rules later this year and aims to start implementing some provisions later this year, subject to any changes made based on public comments.
View an unofficial copy of proposed IDR regulation here and a fact sheet with further information here. View an unofficial copy of the RFI here, and a fact sheet with further information here.
Fighting for Debt Relief at the Supreme Court
Since President Biden first announced his intention to cancel up to $20,000 in student loan debt for the vast majority of borrowers, opponents of student debt relief have filed legal challenges seeking to halt this effort. In December, the Supreme Court agreed to hear two of these challenges– Nebraska v. Biden (recaptioned Biden v. Nebraska at the Supreme Court), brought by Republican officials in Nebraska, Missouri, Kansas, South Carolina, Arkansas, and Iowa, and Brown v. Biden (recaptioned Biden v. Brown at the Supreme Court), a challenge brought by student loan borrowers in Texas and funded by a right-wing dark-money group.
Today, an historic coalition of cities, states, experts, and advocates filed more than a dozen amicus curiae briefs with the U.S. Supreme Court in support of the Biden Administration’s student debt relief program.
This week’s briefs support the Justice Department’s effort to defend this policy before the nation’s highest court. To date, more than 26 million Americans have applied for student debt relief and more than 40 million Americans are expected to benefit when this program is fully implemented.
Leaders and public officials join law scholars, economists, sociologists, higher education and public policy experts from across the political and ideological spectrum in briefing the high court. The briefs represent the breadth of communities that stand to benefit from student debt relief, including working people, borrowers of color, veterans, older people, people of faith, along with cities and states across the country. Together, these briefs showcase the broad support, strong legal foundation, and urgent economic necessity underpinning President Biden’s effort to cancel student debt for 40 million Americans.
A brief by ArchCity Defenders and other Missouri consumer advocates, filed by the UC Berkeley Center for Consumer Law & Economic Justice, offering new evidence that the state-backed student loan company Missouri Higher Education Loan Authority (MOHELA), which is not a party to this case, cannot give standing to the states challenging debt relief in Biden v. Nebraska. This brief is available here: https://protectborrowers.org/wp-content/uploads/2023/01/22-506_Biden-v-NE_ArchCity-Defenders-and-LSEM_AMICI-CURIAE.pdf
The issue of student debt has been a key one on the Democratic side of the presidential campaign (not the Republicans who like to accentuate the stress without actually doing anything about it), but the Obama Administration has been taking what actions it can – in face of Republican obstruction in Congress to accomplish anything that would improve the lives of working Americans- to help Americans manage their student debt. The White House issued a Fact Sheet detailing these actions.
Higher education is one of the most important investment individuals can make for themselves and for our country. Today, 11 of the 15 fastest-growing occupations require a postsecondary education. That’s why the President has made historic investments to help millions of Americans afford college by doubling investments in grant and scholarship aid through Pell grants and tax credits, keeping interest rates low on federal student loans, and creating better options to help borrowers manage debt after college like the Pay as You Earn (PAYE) plan.
As detailed in a new post on student debt trends and state-by-state data being released by the Council of Economic Advisers, these efforts are paying off. More students are graduating college than ever before. More than four of five Direct Loan recipients with loans in repayment are current on their loans. Delinquencies, defaults, and hardship deferments are all trending downward, with nearly three million borrowers successfully accessing a pathway out of default through loan rehabilitation since 2010. And more students are taking action on their student debt when they need support, with nearly five million Direct Loan borrowers taking advantage of repayment options like the President’s PAYE plan, which caps monthly student loan payments at 10 percent of income, up from 700,000 enrolled in 2011.
Many students access student loans to help finance their education; typically, that investment pays off, with bachelor’s degree recipients earning $1 million more in their lifetime and associate’s degree recipients earning $360,000 more, compared to their high school counterparts. But for some, burdensome student loan debt can present a challenge as they seek to start a career, raise a family, purchase a home, start a business, or save for retirement.
Guaranteeing strong consumer protections and building a system of high-quality customer service are important components of a federal student loan system that expands college opportunity and provides reassurance to American families that pursuing a college degree and responsibly borrowing to pay for college will not threaten their future financial security.
The White House has just announced new actions while highlighting the progress already made to help ensure the more than 40 million Americans with student loan debt understand their repayment options and access high-quality customer service, strong consumer protections, and targeted support to repay their student debt successfully.
New Actions on Student Debt
Over the past few years, the Administration has stepped up efforts to ensure that flexible repayment options are available to support Americans with federal student debt. Today’s actions build on that progress and provide a roadmap to guide and support borrowers as they seek to manage and repay their debt successfully:
New Goal to Enroll 2 million More Borrowers in Plans like Pay As You Earn (PAYE).The President’s PAYE and related income-driven repayment plans are available to help borrowers who may be struggling to manage their debt effectively. Yet, too many borrowers still do not know about this important option. Leveraging key improvements in loan servicing and customer service, better tools and resources, targeted outreach to borrowers, and partnerships with key external organizations under the Student Debt Challenge, the Administration is announcing a new goal to enroll two million more borrowers in plans like PAYE by this time next year.
Launch of StudentLoans.gov/Repay. To help borrowers easily navigate the complexity of student loan repayment options, the U.S. Digital Service and the Department of Education’s Office of Federal Student Aid have launchedStudentLoans.gov/Repay to help drive students to their best repayment option in five steps or less. Built mobile-first, and using human-centered design,StudentLoans.gov/Repay was designed to make repayment information as easy to understand as possible.
Strengthening Consumer Protections through New Standards for Student Loan Servicing.The Department of Education and Department of the Treasury – after consulting with the Consumer Financial Protection Bureau (CFPB) and their work with Illinois Attorney General Lisa Madigan and other state attorneys’ general – have developed clear student loan borrower rights and protections in three key areas: (1) providing accurate and actionable information about account features, borrower protections, and loan terms; (2) establishing a clear set of expectations for minimum requirements for communication and services provided by student loan servicers, including adequate and timely customer service; and (3) holding servicers accountable for fixing errors, being responsive to borrowers, and resolving problems by ensuring that borrowers, federal and state agencies and regulators, and law enforcement officials have access to appropriate channels of recourse when violations of federal or state consumer financial laws occur. The Department of Education will ensure all borrowers with federal Direct Loans can rely on high-quality service in line with these standards and protections. The Department of Education will implement this effort as part of its new vision for servicing student loans.
Better Information to Help Borrowers Take Action on their Debt: CFPB Prototype Student Loan Payback Playbook. The CFPB is seeking comment on a new set of student loan servicing disclosures—a student loan Payback Playbook – that provides borrowers personalized information to better understand their repayment options and find a monthly payment they can afford. To help borrowers choose the best repayment plan with the most up-to-date information based on their circumstances, borrowers would see a plain language Playbook on their monthly bill, in regular email communications from their student loan servicer, or when they log into their student loan account. The Department of Education, working with the CFPB, will be finalizing and implementing these disclosures for federal loans borrowers.
Ensuring Effective Student Loan Counseling. The Department of Education will work to improve the timing and content of current loan counseling efforts, including statutorily required entrance and exit counseling, to help students make better borrowing decisions, increase college completion, promote successful loan repayment, and reduce delinquencies and defaults. Specifically, the Department will upgrade and redesign its Entrance and Exit Counseling tools on StudentLoans.gov – which serves 6.5 million students a year – based on user analytics and direct input from more than 500 borrowers, financial aid administrators, policymakers, and higher education organizations. The Department is also developing a loan counseling experiment to rigorously evaluate the effectiveness of different counseling tools and the impact of offering borrowers more frequent information and guidance beyond the statutorily required one-time entrance and one-time exit counseling.
Leveraging Research to Drive Better Student Outcomes. The Department of Education will pilot Advancing Insights through Data (AID), a research partnership program that will offer other federal agencies and affiliated researchers data access to conduct research that can inform and advance policies and practices that support students’ postsecondary success and strengthen repayment outcomes for borrowers. Starting with Federal Reserve Board researchers this fall, the program will allow experts to apply to securely access and match administrative student aid data files with other survey and administrative data, while ensuring safeguards are in place to protect the privacy of students and families. AID builds on the Administration’s recent efforts to leverage government data in ways that can improve service delivery, promote transparency, and strengthen accountability, particularly through the College Scorecard, which includes the most comprehensive, reliable data ever published on students’ post-college earnings and repayment outcomes. The Department is also exploring future opportunities for new research partnerships.
Modernizing Credit Reporting for Student Loans To Ensure Fair Treatment Of Borrowers. The Department of Education and the Department of the Treasury, in consultation with the CFPB, are working collaboratively with the credit reporting industry to develop guidance for servicers, lenders, and others who furnish data to the credit bureaus to determine how best to report student loan data so that it is fair, consistent, and accurately reflects repayment activity. This effort is another critical part of the Department’s new vision for servicing student loans.
Over 40 new student debt challenge takers.Earlier this month, the White House issued a call to action for colleges, universities, non-profits, businesses, state and local governments, and other employers to help more borrowers better understand their options, and to take action to enroll those borrowers in PAYE and related plans so they can manage their monthly payments and avoid delinquency and default. There is a growing list of commitments from organizations working to inform their employees and members about PAYE and related plans, train human resources (HR) staff on the importance of helping borrowers understand their student loan repayment options and the steps individuals must take to enroll, and use digital platforms to highlight PAYE and related plans. In the few short weeks since the Debt Challenge was launched, there have been over 40 commitment makers, and the Administration is encouraging more colleges, businesses, non-profits to take action. As of April 26, the list of commitments includes:
o ACCESS College Foundation
o AFSCME
o Achieving the Dream
o American Student Assistance
o American Sustainable Business Council
o California State University, Long Beach
o California Association of Nonprofits
o The Century Foundation
o College Advising Corps
o College Forward
o College Greenlight
o Dyersburg State Community College
o Florida International University
o Friendship Public Charter School
o Indiana University
o Iowa State University
o Jobs for the Future
o Lake Area Technical Institute
o Lone Star College
o Marcus Foster Education Institute
o Marks and Associates
o Montana State University Bozeman
o Morgan State University
o National Housing Resource Center
o Natixis Global Asset Management
o New Haven Promise
o Operation HOPE, Inc.
o Parkway School District
o Pharr-San Juan-Alamo Independent School District
o Rutgers University – Newark
o Tennessee Technological University
o University of Pittsburgh
o University of Memphis
o University of South Carolina School of Medicine Greenville
