Proposed Hardship NPRM Comes as Right-Wing AGs Continue Legal Attacks on Millions of Working Families With Student Debt
October 25, 2024 | WASHINGTON, D.C. — On the same week as oral arguments in the 8th Circuit on the partisan case challenging the Saving on a Valuable Education (SAVE) Plan that has forced millions of borrowers into economic limbo and wreaked havoc on the student loan system, the Biden-Harris Administration unveiled its long-awaited proposed rule to provide student loan debt relief to borrowers experiencing hardship. The Notice of Proposed Rulemaking (NPRM) is expected to be published in the upcoming weeks and will be subject to a 30-day public comment period where the public will have an opportunity to weigh in and express their support and other feedback.
In response, Persis Yu, Deputy Executive Director of the Student Borrower Protection Center issued the following statement:
“We applaud President Biden and Vice President Harris for unveiling the Administration’s proposed rule giving the Secretary broad authority and necessary flexibility, now and in the future, to deliver debt relief for borrowers most likely to face difficulties repaying their student loan debt. When enacted, this rule has the potential to free millions of borrowers—from recent graduates to Parent PLUS borrowers—from the crushing weight of the student debt crisis and unlock economic mobility for millions of workers and families.
“Over the last year, right-wing Attorneys General have relentlessly attacked millions of working families with student debt and pushed them further into debt in an attempt to score political points. Despite legal efforts attempting to block this relief at every step, the Biden-Harris Administration has continued to fight on behalf of student loan borrowers and their families in court and explore every legal pathway to deliver on promised student loan debt relief. This proposal recognizes what Americans from all walks of life have known for decades—too often, higher education does not deliver on its promise of economic mobility and financial stability, and borrowers and their families should not be sentenced to a lifetime of debt as a result.”
Background
Within hours of the U.S. Supreme Court’s ideological decision to strike down the Biden Administration’s original debt relief plan, President Biden announced that he would utilize a different tool—the Higher Education Act—and enact a new debt relief program through the process known as negotiated rulemaking.
Just over one year ago, on October 10, 2023, ED formally kicked off the negotiated rulemaking process, reaching consensus on several proposals that would provide targeted relief to borrowers in certain circumstances. The Administration issued an NPRM on the first package of targeted relief in April 2024. On September 3, 2024, seven states, led by Missouri Attorney General (AG) Andrew Bailey, sued to block the implementation of the NPRM. A Missouri judge issued a preliminary injunction blocking these proposals even though that rule is not yet final. In recognition of the need for a broader category of debt relief, negotiators also discussed ways they could support borrowers experiencing hardship as a result of their student loan debt.
Today’s NPRM comes after several months of steadfast advocacy from borrowers, advocates and policymakers calling for the Administration to unveil this proposal. Over the summer, nearly 230 advocacy, labor, and civil rights groups came together to urge the Biden Administration to swiftly and urgently unveil its NPRM to provide student loan debt relief to borrowers experiencing hardship. The NPRM is even more crucial as federal judges have blocked portions of the new SAVE plan, throwing the student loan system into chaos. A copy of the letter is available here.
Among the groups signed onto the letter are AFL-CIO, AFT, NAACP, UnidosUS, AFSCME, SEIU, and NASW. In addition to the coalition letter, over 25,000 borrowers have sent individual letters to the White House urging the President to finalize the hardship NPRM.
The letter followed a May 2024 petition, signed by 22,337 borrowers and including nearly 5,000 individual borrower testimonials in support of the Biden Administration’s first package of rules that would provide relief to 30 million Americans with student debt, that were submitted to the Federal Register in response to the NPRM 30-day public comment period.
In December 2023, an interdisciplinary team of economists and law scholars at the University of California Student Loan Law Initiative (UC SLLI) published a study pinpointing the amount of debt that causes this hardship to individuals and families. The study built on the research base that has grown over the last decade confirming the myriad ways student debt affects borrowers’ lives and livelihoods—diminishing homeownership, jeopardizing retirement security, inhibiting savings, undermining financial security, increasing the cost of other financial products, steering borrowers away from public service careers, contributing to workforce shortages in health care, driving highly-educated young people out of rural communities, slowing small business formation and dampening growth of the entire U.S. economy.
Further Reading
SBPC press release on the Kansas and Missouri injunctions temporarily halting SAVE: “A Recipe for Chaos”: Missouri and Kansas Judges Temporarily Halt Borrowers’ Access to Lower Student Loan Payments, Debt Relief
June 2024 letter signed by nearly 230 advocacy, labor, and civil rights groups came together to urge the Biden Administration to swiftly and urgently unveil its NPRM to provide student loan debt relief to borrowers experiencing hardship: See here
May 2024 comment, which includes a cover letter that spotlights 15 borrower stories, and a petition signed by 22,337 borrowers and nearly 5,000 individual borrower testimonials: See Here
May 2024 coalition comment in support of student debt cancellation: See Here
May 2024 SBPC public comment offering technical feedback on the specific proposals: See Here
UC SLLI’s economic analysis finding that student debt causes widespread financial hardship: https://www.slli.org/databrief3
UC SLLI’s legal analysis demonstrating that the Secretary of Education has the authority under the Higher Education Act to deliver relief for borrowers experiencing hardship: http://www.slli.org/hardship-waiver-memo
SBPC’s blog underscoring the need for President Biden’s new debt relief effort to include a plan to support borrowers experiencing hardship: https://protectborrowers.org/bidens-student-debt-relief-plan-b-must-not-leave-millions-in-hardship-behind/
SBPC press release on the 2023 SCOTUS ruling: Supreme Court Sides with Right-Wing Special Interests, Blocking President Biden’s Student Debt Relief Plan
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.