WASHINGTON – President Joe Biden’s second attempt to cancel a student loan moved forward Tuesday with a first round of negotiations to help guide the administration toward a new plan.
The Biden administration promised to try again after the Supreme Court rejected an earlier plan in June.
In opening remarks at Tuesday’s hearing, Education Undersecretary James Kvaal said the debt crisis threatens to undermine the promise of higher education.
“Student loan debt in this country has grown so large that it diverts the benefits of college for many students,” Kvaal said in prepared remarks. “Some loans made to young adults extend into retirement with no hope of repayment. These debt burdens are shared by families and communities.”
Biden ordered the Department of Education to find another avenue for loan relief after high court conservatives ruled that it could not cancel loans using a 2003 law called the HEROES Act.
The latest attempt will rely on a sweeping law known as the Higher Education Act, which gives the secretary of education authority to waive student loans, although how far that power extends is a matter of legal debate.
The Education Department hopes to resolve the dispute by adding federal rules that clarify when the secretary can forgive student loans.
However, to change those rules, the department must form a committee of outside negotiators to help discuss the details.
President Joe Biden speaks about student loan debt forgiveness, in the Roosevelt Room of the White House, Oct. 4, 2023.AP
The first day of negotiations, held virtually, lasted more than five hours, but did not appear to bring the department any closer to clarity.
Much of the discussion focused on the shortcomings of existing student loan discharge programs or the problems caused by student loan interest.
Department officials repeatedly intervened to say those issues do not fall within the scope of the current process.
All of the negotiators come from outside the federal government and represent a variety of points of view on student loans. The panel includes students and officials from a variety of universities, along with loan servicers, state officials and advocates, including the NAACP.
It is unclear who will be eligible for forgiveness under the new plan and how much relief they would receive. Those details will be decided after the administration receives briefings from negotiators, who will meet in a series of sessions scheduled to continue through December.
In response to the panel’s suggestions, administration officials said they are not considering a blanket cancellation.
“We are not looking at a broad-based debt cancellation in which we are going to eliminate the debt in its entirety. “We are looking at individual ways the secretary can exercise the authority to grant waivers,” said Tamy Abernathy, who heads a policy group at the department.
He later clarified that the department’s next proposal “could completely cancel the debt of some borrowers, but it could not completely cancel the debt of all borrowers.”
At the end of the process, negotiators will vote on a proposed rule drafted with input from their discussions. If they reach consensus on a proposal, the department will move forward with it. If they don’t, the agency will propose its own plan, which can be finalized after a public comment period.
Negotiated rulemaking is routinely used by the Department of Education to promulgate federal regulations, and is a requirement for any regulations related to student financial aid. It can be a long and laborious process and often ends without consensus among negotiators.
Biden has called for a new plan to help “as many borrowers as possible,” but it is unclear whether it will be as broad as his first proposal. That plan would have canceled up to $20,000 in federal student loans for borrowers with incomes under $125,000 or couples under $250,000.
People demonstrate in front of the Supreme Court, Friday, June 30, 2023.AP
Republicans spoke out against the cancellation, saying it would add an unfair benefit to college graduates at the expense of millions of taxpayers who did not attend college. In 2022, about 47% of Americans age 25 and older had at least an associate’s degree, along with 15% who went to college but had no degree, according to the Census Bureau.
The administration plans to finalize the new rule sometime next year, but Education Secretary Miguel Cardona has declined to say whether it will be in effect before next fall’s presidential election. In a recent interview with The Associated Press, he said he is working “as quickly as possible.”
He also noted that the court’s ruling “will have to take into account the steps we take in the future.”
Some legal analysts see the court’s decision as a rejection of any mass cancellation without congressional action. The court concluded that the education secretary has the power “to make modest adjustments and additions to existing provisions, not to transform them.”
As a starting point for negotiators, the Department of Education published an issues paper outlining some of the main issues that will be discussed. It offers few clues about the department’s vision for loan cancellation, but identifies five groups of borrowers who may need help.
Negotiators are asked how the agency should help:
- Borrowers whose interest grows so much that their balances exceed what they initially owed;
- Those who are eligible for loan discharge under existing income-based repayment plans but who have not applied for those programs;
- Those who took out loans to attend college programs that did not lead to jobs with enough income to repay their loans;
- Borrowers with older loans contracted before Congress created benefits aimed at easing the burden of student debt;
- Those who face difficulties “that the current student loan system does not adequately address.”
It also asks negotiators to discuss the types of factors that would justify canceling the loan.
The document notes that in deciding whether to collect the debt, some other federal agencies consider whether it “went against equity and good conscience” or would “impose financial hardship.”
At a White House briefing last week, Biden drew attention to the problem of growing interest.
Many college graduates have been making payments for years, he said, “but because of interest, they still owe more than they originally borrowed.”
“My administration is doing everything we can to provide student debt relief to as many as we can, as quickly as possible,” Biden said.
Negotiators will meet virtually during two-day sessions on Nov. 6 and Dec. 11.
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Source: vtt.edu.vn