Student-Loan Forgiveness Should Be Simplified | #Education


  • The Education Dept. is undergoing negotiations on reforms to the student-loan industry.
  • Sen. Elizabeth Warren joined 6 of her colleagues in requesting specific reforms be implemented.
  • Those include streamlined loan forgiveness programs and simpler repayment plans.

The Education Department is currently undergoing negotiations to implement reforms to the student-loan industry, and a group of Democratic lawmakers have some ideas of what those reforms should include — especially when it comes to loan forgiveness.

On Monday, Massachusetts Sen. Elizabeth Warren joined Senate Majority Whip Dick Durbin and five other Senate Democrats in sending a letter to Education Secretary Miguel Cardona regarding protections for student-loan borrowers. The Education Department has already begun implementing some reforms, like a recent overhaul of the Public Service Loan Forgiveness (PSLF) program, and the lawmakers want to ensure the department will continue building on those changes.

“The Department’s initial proposals to simplify and expand student loan discharge options and repayment plans were a positive and much-needed step forward in helping borrowers get the assistance they need and deserve,” the Democrats wrote. “We applaud the Department for its work alongside negotiators to deliver additional student debt relief and protections.”

Here are the four changes the seven lawmakers requested from Cardona:

  1. Create a new income-driven repayment (IDR) plan to simplify the process for student-loan borrowers. The lawmakers suggest sunsetting enrollment to all existing IDR plans and creating a single plan for all borrowers seeking to enroll. This new plan would have a simple name, have a repayment period no longer than 20 years, and ensure eligible borrowers have expanded access to loan forgiveness.
  2. Speed up the loan-forgiveness process for borrowers defrauded by for-profit schools. Veterans and Pell Grant recipients should be eligible for discharge, along with Direct Loan borrowers who already qualify.
  3. Eliminate restrictions on closed-school discharges related to whether the borrower transferred to another institution. All students who attended a school at the time that it closed, or 180 days prior, should be eligible for loan forgiveness, regardless of whether they end up getting an education at a different school.
  4. Recent PSLF reforms should be made permanent. The department instituted a waiver through October 31, 2022 to allow additional repayment plans to qualify for PSLF, which forgives student debt for public servants after ten years. The lawmakers request that waiver be made permanent.

The Education Department has taken a number of steps this year addressing flaws in the student-loan industry. For example, Cardona has so far canceled $11.5 billion in student debt for targeted groups of borrowers, like those with disabilities, and he reversed a methodology created under Education Secretary Betsy DeVos, that denied relief for 99.4% of defrauded borrowers.

Most recently, the department announced a PSLF overhaul that will bring 550,000 borrowers closer to relief, but as the lawmakers noted, those reforms are temporary and the 45 million borrowers across the country bearing a $1.7 trillion student debt burden need permanent relief.

Meanwhile, the pandemic pause on student-loan payments is lifting in less than 100 days, and Warren is continuing to push for $50,000 in student debt cancellation to give borrowers relief as soon as possible.

“Ultimately, the student loan system is broken,” Warren previously told Insider, adding that the best way to protect borrowers “is to cancel student debt, so that no borrower’s future is held hostage by corporations profiting off their financial distress.”



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