Unclear on Biden’s Student Loan Priorities

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  • Biden’s agenda, released Friday, includes proposals for forgiving student loans.
  • The Department of Education plans to improve its loan forgiveness programs by 2022, but details remain vague.
  • Democrats and borrowers continue to push for immediate debt cancellation, while Biden resists.
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President Joe Biden’s regulatory agenda, unveiled Friday, covers a wide range of issues, from tackling the climate crisis to strengthening protection 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, there are few details.

IN list of 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 authorities“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 last 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’s Regulatory Office, 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.

When contacted for further clarification on these regulatory actions, a department spokesperson told Insider that the agency is currently seeking stakeholder feedback on both its initial list of topics and other issues. After holding public hearings, he will determine the further path of rulemaking. He did not disclose the timeline for this rule-making or what led to additional topics.

“The administration is committed to ensuring that borrowers can access the loan benefits to which they are entitled, and we look forward to working with the field to develop and implement much-needed improvements,” the spokesman said.

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, the deficiencies in the program persisted 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 approval rate for the program was 99.2%, but when DeVos came to power, 99.4% of eligible borrowers were denied the opportunity to participate in the program, and she would refuse to participate in the program. 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.

“The time has come,” 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. “

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