- The Education Department is about to hold its last round of negotiations for student-debt relief.
- Following negotiations, the public will have an opportunity to comment on the proposals.
The Education Department will soon enter its next phase in the process to get student-loan forgiveness for millions of borrowers.
After the Supreme Court struck down President Joe Biden's first attempt at broad student-debt relief at the end of June, the Education Department has been working through a lengthier process to implement relief using the Higher Education Act of 1965.
As opposed to Biden's first attempt at relief, the Higher Education Act requires the administration to go through a process known as negotiated rulemaking, which includes a series of negotiation sessions with stakeholders over the text of the rule and an opportunity for public comment — and it could take a least a year to complete.
Still, the department has vowed to move as quickly as possible, and on December 11 and 12, it will be holding its final round of negotiations before moving on to draft the final text for the relief.
"This rulemaking process is about standing up for borrowers who've been failed by the country's broken student loan system and creating new regulations that will reduce the burden of student debt in this country," Education Secretary Miguel Cardona previously said in a statement.
Here's what we know so far about the relief, and what borrowers can expect in the coming months.
What's being proposed for student-debt relief
A week before the final negotiation session, the Education Department released an updated draft text for the final relief plan. It highlighted five groups of borrowers it's planning to target for relief:
Borrowers on income-driven repayment plans with balances greater than what they originally borrowed, eligible for up to $20,000 in relief.
Other borrowers with balances greater than what they originally borrowed, eligible for up to $10,000 in relief.
Borrowers whose loans entered repayment at least 20 years ago.
Borrowers eligible for relief under income-driven repayment plans or other targeted programs like Public Service Loan Forgiveness but have not applied.
Borrowers who went to schools that left them with too much debt compared to their post-grad earnings.
During the December session, negotiators will discuss those proposed groups, along with alternate ways to get relief to another group of borrowers experiencing hardship.
The proposed text also includes language likely intended to protect the Education Department from any legal challenges that could arise. Specifically, there is a section in the text that explains how the department would reimburse the agencies that hold the accounts that would be discharged — protecting itself from the agencies' potential lawsuits that could argue they lost revenue from the relief.
Next steps after negotiations
Once the December session wraps up, the committee will determine if it reached a consensus. For that to happen, every member of the committee must agree with each provision in the text, and following consensus, the department will begin finalizing the draft rules for publication on the Federal Register. After that, the public will have the opportunity to comment on the text, and the department could change the draft depending on the comments it receives.
According to the department's latest regulatory agenda, the Education Department isn't planning on formally issuing its proposed rule for debt relief until May 2024. Tamy Abernathy, the department's negotiator, said during the October sessions that unless the education secretary chooses to implement the relief early, it would not go into effect until July 1, 2025.
In the meantime, the department has implemented debt relief for targeted groups of borrowers through one-time account adjustments for those who have completed the required 20 or 25 years of payments on income-driven repayment plans.
Most recently, the department announced $5 billion in relief for 80,000 borrowers, and a senior administration official told reporters the department would continue looking at borrowers' accounts every other month through the spring of next year.