Biden’s Department of Education has just outlined their priorities for student loan repayment

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Joe Biden

President Joe Biden. AP Photo / Alex Brandon

  • Biden’s regulatory agenda, released Friday, includes proposals for student loan forgiveness.

  • The Department of Education plans to improve loan forgiveness programs by 2022, but details remain vague.

  • Democrats and borrowers continue to push for immediate debt cancellation, while Biden resists.

  • See more stories on the Insider business page

President Joe Biden’s regulatory agenda, released Friday, covers a wide range of issues, from tackling the climate crisis to strengthening protections against racial discrimination. It is noteworthy that, unlike his budgethe even mentions forgiving student loans. But for borrowers expecting clarity about what will happen to their debt burden, details are scarce.

IN list The regulation, usually issued twice a year, describes how Biden plans to advance his agenda through each federal agency.

According to the Department of Education page, Biden’s agenda includes:improvement of student loan cancellation bodies“in which Education Minister Miguel Cardona” will amend the rules to improve borrower eligibility, application requirements and processes “for borrowers who meet loan cancellation criteria, such as complete and permanent disability or attendance at a recently closed school.

The department also said that consideration public service loan forgiveness (PSLF) program and “plans to consider these rules for improvement”, along with correction “Borrower protection until repayment,” which forgives loans to students defrauded by commercial schools.

The department plans to finalize the rules by April 2022.

“The past four years have taught a clear lesson about what happens when the executive branch fails to fulfill its responsibility to protect the American people,” said Sharon Block, acting administrator of the White House administration, in a statement. “Our first regulatory program demonstrates our commitment to reversing this trend.”

At the end of May, the Department of Education announced he began the process of issuing new higher education regulations, and Friday’s schedule confirmed those plans. But no further details were provided on what the mentioned improvements would look like.

This may be due to the department being in the early stages of rulemaking. The first step in the process will be a hearing in June to solicit feedback on student loan forgiveness programs, followed by a “consensus rulemaking” hearing in June where stakeholders will meet with the department to review proposed regulations, and it may take a year or more.

But borrowers and lawmakers are increasingly disenchanted with the timing of student loan borrowers’ forgiveness.

Biden campaigned reforming the PSLF, which allows government and nonprofit employees with federal-backed student loans to apply for a loan forgiveness after 120 monthly payments have been confirmed under the applicable repayment plan.

However, deficiencies in the program persist for years. 98% of borrowers were rejected from the program, encouraging 56 Democrats to convince Cardona to fix the program in early May, and a lawsuit was brought against Education Minister Betsy DeVos many times by the high failure rate of the program.

Borrowers have had similar problems with protecting the borrower to maturity. Over the past ten days several commercial schools closed due to investigations alleging schools engaged in federal loan fraud, prompting President Barack Obama to develop a student debt write-off program for eligible defrauded borrowers.

Under Obama, the program had 99.2% approval, but when DeVos took charge, 99.4% of eligible borrowers were denied the opportunity to participate in the program, and it will testify soon why did this happen.

Thus, while the department’s plans to revise these programs are promising for borrowers, the specific details are unclear. This is why Massachusetts Senator Elizabeth Warren and other Democrats are calling on Biden to write off $ 50,000 in student debt to the borrower to provide immediate relief.

“It’s time,” Warren told Insider on Tuesday. “We know what the problem is: Student loan arrears are holding back tens of millions of people across the country. People who cannot buy houses, people who cannot buy cars, people who cannot start a small business. We need to cancel student loan debt not only for these people individually, but for our entire economy. “

The Department of Education did not immediately respond to Insider’s request for comment.

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