We summarize the administration’s action on debt cancellation, income-driven repayment plans and Public Service Loan Forgiveness.
President Joe Biden on Wednesday made one of his most controversial education policy decisions to date, announcing he will use executive power to cancel up to $10,000 in student loan debt for most borrowers, and up to $20,000 for federal Pell Grant recipients.
But he also touted a raft of other adjustments and proposals related to the troubled student loan system, which policymakers and higher education advocacy groups have said is in desperate need of reform. And he extended a pandemic-era pause on student loan repayments through the end of the year.
Below we summarize significant Biden administration policies and regulatory moves on loan cancellation, income-based repayment plans and the Public Service Loan Forgiveness program.
Biden fulfilled a key campaign promise with his cancellation of up to $10,000 for most borrowers and $20,000 for Pell recipients, who come from low- and moderate-income backgrounds. Progressives cheered the move, even though some had demanded more debt forgiveness. Conservatives blasted the president, casting his decision as wasteful and politically motivated, designed to benefit Democrats before the November midterm elections.
The administration on Wednesday detailed its regulatory proposal for an income-based repayment system, which uses borrowers’ salaries to determine a monthly payment. Usually after 20 or 25 years, participating borrowers are eligible to have their balances erased. But the current program has suffered from administrative failures, limiting how many have benefited from it, the Education Department has said.
The administration already unveiled a draft regulation governing Public Service Loan Forgiveness, which eliminates the debt of borrowers in jobs like government and nonprofit work as long as they make a decade of qualifying payments.
Only a fraction of borrowers had been able to take advantage of the program, however, as it also suffered from poor administrative oversight. To ease the path for borrowers who are pursuing PSLF, the Education Department has temporarily given more flexibility to the types of payments that are eligible. This waiver of the program’s requirements expires at the end of October.
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Data from CUPA-HR also suggests workers are dissatisfied with a lack of opportunities to work remotely.
The online program manager expects the restructuring will lead to about $70 million in annual cost savings.
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Data from CUPA-HR also suggests workers are dissatisfied with a lack of opportunities to work remotely.
The online program manager expects the restructuring will lead to about $70 million in annual cost savings.
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