December 11, 2023
Pressley, Warren, Lawmakers Urge Dept. of Education to Use Full Authority, Expand Student Debt Cancellation by Strengthening Proposed Rules for Relief
TODAY: Pressley to Testify at Biden Admin’s Final Hearing on Student Debt Cancellation
WASHINGTON — Today, Congresswoman Ayanna Pressley (MA-07) and Senator Elizabeth Warren (D-MA), along with Senators Chuck Schumer (D-NY), Bernie Sanders (I-VT), Alex Padilla (D-CA), and Representatives Ilhan Omar (MN-05) and Frederica Wilson (FL-24), sent a letter to U.S. Secretary of Education Miguel Cardona, urging him to leverage his existing and full authority under the Higher Education Act to provide expanded student debt relief to working and middle-class borrowers.
The letter comes in response to an initial draft of the proposed rule – and ahead of the final session of the negotiated rulemaking (“neg-reg”) process – that would limit student debt relief to four specific subsets of borrowers: (1) borrowers with outstanding federal student loan balances that exceeds their original principal balance (2) borrowers who have paid their loans for over 25 years; (3) borrowers who are eligible for forgiveness but have not enrolled; and (4) borrowers who took on loans to attend unaccredited or predatory programs.
Following the Supreme Court’s June 2023 ruling that struck down President Joe Biden’s initial student debt relief plan, President Biden swiftly implemented two measures to expedite debt relief for a wide range of borrowers, while simultaneously supporting them during the repayment process. The first was the Saving on a Valuable Education (SAVE) Plan, an income-driven repayment (IDR) plan that prevents balances from growing because of unpaid interest and lowers borrower monthly payments. The second measure was the initiation of a negotiated rulemaking procedure to establish an alternative debt forgiveness pathway for a substantial number of working and middle-class borrowers, leveraging the authority granted under the Higher Education Act.
“This rulemaking process presents a significant opportunity to address pervasive problems within the student loan system by fortifying the authority to waive debt, in order to ensure that postsecondary education becomes accessible to all students,” wrote the lawmakers. “We urge you to leverage this authority to its fullest extent, maximizing relief for the greatest number of borrowers facing financial hardship.”
The Department of Education (the Department or ED) is currently in the midst of three sessions of this student debt neg-reg process. In advance of the second session, the Department issued an initial draft of the rule that would make four subsets of borrowers eligible for student debt relief: (1) borrowers with outstanding federal student loan balances that exceed their original principal balance, due to interest; (2) borrowers with loans that have been in repayment for 25 years or more; (3) borrowers who are eligible for forgiveness under an enumerated repayment plan or loan program but have not enrolled; and (4) certain borrowers who took on loans to attend programs that provide insufficient financial value (including career-training programs with unreasonably high debt or low earnings for graduates, and programs at institutions with high loan default rates).
“While we commend the Biden Administration for taking key steps forward to fix the broken student loan system through the regulatory process, we believe that the regulatory text could be improved to better take advantage of the Department’s full authority under the HEA to protect vulnerable borrowers. As we lend our support to your diligent efforts to provide debt relief through regulatory procedures, we urge you to consider several recommendations to strengthen the Department’s debt relief rule,” continued the lawmakers.
The lawmakers proposed the following actions to strengthen the proposed student debt relief rule and provide more relief to vulnerable borrowers:
- Eliminate all debt that exceeds the original principal balance of the loan. Under the current rule, the “Secretary may waive all or a portion of the amount by which a borrower’s total outstanding balance exceeds the original principal balance of the loan.” The proposed rule should eliminate all debt that exceeds the initial principal due to runaway interest.
- Provide full cancellation, not just a waiver of excess interest, for borrowers who have repaid enough to cover their original principal. The current draft rule does not extend relief to borrowers who have diligently repaid enough to cover their original principal. The Department should provide full cancellation, not just a waiver of excess interest, for borrowers who have repaid enough to cover their original principal.
- Eliminate the sudden cliff that would give full relief to borrowers whose loans first entered repayment at least 25 years ago and no relief to similarly situated borrowers. As written, the proposed rule would only extend relief to borrowers who entered repayment 25 years ago or more by July 1, 2025, would qualify for relief. However, a borrower who hits the 25-year mark on July 2, 2025 would be ineligible for relief. ED should remove the cutoff date for relief for borrowers who have been in repayment for decades, and instead permit borrowers to become eligible for this relief on a rolling basis.
- Extend relief to additional categories of borrowers with financial hardship and create a catch-all category for unforeseen forms of hardship. In addition to the categories of hardship listed in ED’s issue paper, ED should consider other income-based indicators of financial hardship, such as receipt of Earned Income Tax Credits, Supplemental Nutrition Assistance Program, or Supplemental Security Income — as well as other non-income-based indicators such as incarceration status or eviction history. The rule should also include a catch-all provision to capture other forms of hardship in the interest of justice and historically restrictive criteria for relief eligibility.
- Extend relief to borrowers who have been victims of student loan servicer misconduct or error. The Department should extend relief to borrowers who have been victims of student loan servicer misconduct or error, but the current draft text does not include protections for borrowers who have faced predatory loan servicer practices, such as forbearance steering, overcharging, or failing to enroll borrowers in IDR plans for which they were eligible, upon their request.
- Eliminate the need for borrowers to submit burdensome applications by basing eligibility for relief on information that ED already has or that it can acquire from other agencies. The rule should extend relief to borrowers automatically, without requiring them to submit applications. ED can largely base relief on information already in its possession through payment history databases, Free Application for Federal Student Aid (FAFSA) applications, and on information from other federal agencies.
A copy of the letter can be found here.
- On November 30, Rep. Pressley emphasized the crucial role of the Consumer Financial Protection Bureau (CFPB) in protecting student loan borrowers from incompetent and predatory student loan servicers.
- On November 6, 2023, Rep. Pressley joined Attorney General Andrea Campbell, Mayor Michelle Wu, and Senator Elizabeth Warren (D-MA) for a clinic to help federal student loan borrowers access a temporary opportunity to get closer to Public Service Loan Forgiveness (PSLF).
- On September 25, 2023, Rep. Pressley hosted a policy discussion with borrowers and advocates at which they renewed their urgent call for student debt cancellation with loan payments set to resume on October 1, 2023.
- On August 23, 2023, Rep. Pressley, Sen. Warren, and their colleagues led over 80 lawmakers in a letter to President Joe Biden, urging him to swiftly deliver on his promise to deliver student debt cancellation to working and middle class families by early 2024.
- On August 22, 2023 Rep. Pressley applauded Governor Maura Healey’s plan to provide student debt relief for health care workers in Massachusetts.
- On June 30, 2023, Rep. Pressley responded to the President’s alternative proposal to deliver relief under the Higher Education Act and called for swift and efficient implementation.
- On June 30, 2023, Rep. Pressley issued a statement slamming the Supreme Court’s decision to block President Biden’s student debt cancellation plan and calling on the President to use other tools available to swiftly cancel student debt.
- On May 30, 2023, Rep. Pressley filed an amendment to H.R. 3746, legislation to raise the debt ceiling, to protect student loan borrowers and preserve the Biden Administration’s pause on federal student loan payments.
- On May 24, 2023, Rep. Pressley issued a statement slamming Republicans’ harmful effort to overturn President Biden’s student debt relief, including his debt cancellation plan, the pause on student loan payments, and the expanded Public Service Loan Forgiveness (PSLF) program.
- On May 24, 2023, Rep. Pressley delivered a powerful speech in support of President Biden’s plan to cancel student debt, which would benefit millions of people across the country.
- On April 5, 2023, Rep. Pressley and Senator Elizabeth Warren wrote to the CEO of SoFi Technologies and SoFi Lending Corp calling on the company to answer for its lawsuits attempting to end the student loan payment pause and force borrowers back into repayment.
- On March 7, 2023, Rep. Pressley, along with Sens. Warren, Schumer, Sanders, Padilla and Reps. Clyburn, Omar and Wilson led a letter to the Biden Administration expressing continued support for President Biden’s student debt relief plan.
- On February 28, 2023, Rep. Pressley rallied with borrowers and advocates outside the Supreme Court to call on the Supreme Court to affirm the legality of President Biden’s student debt cancellation plan.
- On November 22, 2022, Rep. Pressley issued a statement applauding the extension of the student loan payment pause.
- On October 25, 2022, Rep. Pressley and Senator Warren toured communities across Massachusetts to celebrate the Biden administration’s student debt cancellation plan and help residents sign up for student loan relief.
- On October 12, 2022, Rep. Pressley joined parent borrowers and advocates for a discussion on the impacts of student debt cancellation on parents and families.
- On September 29, 2022, Rep. Pressley, along with Senate Majority Leader Schumer and Reps. Omar, Jones and advocates, held a press conference to call for swift and equitable implementation of President Biden’s student debt cancellation plan.
- On September 21, 2022, Rep. Pressley delivered a powerful speech on the House floor in which she heralded President Biden’s action to cancel student debt for millions of families in the Massachusetts 7th and across the nation. Watch the full video here.
- On September 12, 2022, Rep. Pressley and Senator Warren wrote to the nine federal student loan servicers to inquire about how they are providing borrowers with accurate and timely information about student loan cancellation.
- On August 24, 2022, Congresswoman Pressley issued a statement applauding President Biden’s action to cancel student debt.
- On August 10, 2022, Congresswoman Pressley and Senator Warren Massachusetts joined Massachusetts union leaders in Dorchester for a roundtable discussion on student debt cancellation.
- On July 18, 2022, Congresswoman Pressley delivered remarks at the American Federation of Teachers (AFT) national convention and renewed her calls for President Biden to cancel student debt by executive action.
- On July 8, 2022, Congresswoman Pressley with The Debt Collective hosted a virtual roundtable with student debt holders from all walks of life to highlight the intersectional burden the nearly $2 trillion student debt crisis has had on individuals and families.
- On June 22, 2022, Congresswoman Ayanna Pressley, with Senator Elizabeth Warren and Senate Majority Leader Chuck Schumer, joined AFL-CIO and union leaders for a roundtable discussion on the importance of student debt cancellation for American workers.
- On May 20, 2022, Congresswoman Pressley applauded the Congressional Black Caucus’ (CBC) statement calling on President Biden to cancel student loan debt.
- On May 4, 2022, Congresswoman Pressley visited Bunker Hill Community College to celebrate the $1 million in federal community project funding she secured and continued her calls for President Biden to cancel student debt.
- On March 17, 2022, Congresswoman Pressley and Arisha Hatch, vice president and chief of campaigns at Color of Change, published an op-ed in Grio calling on President Biden to use his executive order authority to cancel up to $50,000 in student loan debt per borrower.
- On December 8, 2021, Congresswoman Ayanna Pressley, Senator Elizabeth Warren, and Senate Majority Leader Chuck Schumer sent a bicameral letter to President Joe Biden releasing new data about the adverse impact of restarting student loan payments and calling on him to act to cancel up to $50,000 of student debt.
- On December 2, 2021, Congresswoman Pressley delivered remarks on the House floor in which she reiterated her calls for President Biden to cancel $50,000 in federal student loan debt by executive action.
- On October 8, 2021, Representatives Ayanna Pressley and Ilhan Omar and their House colleagues sent a letter to President Biden and Secretary of Education Miguel Cardona urging him to release the memo to determine the extent of the administration’s authority to broadly cancel student debt through administrative action.
- On July 29, 2021, Congresswoman Pressley issued a statement reaffirming President Biden’s authority – and the urgency – to cancel student loan debt.
- On June 23, 2021, Congresswoman Ayanna Pressley, Senator Elizabeth Warren, Senate Majority Leader Chuck Schumer, and Congressman Joe Courtney led their colleagues on a bicameral letter to President Biden calling on him to extend the pause on federal student loan payments.
- On April 13, 2021, Congresswoman Pressley testified at a Senate Banking, Housing, and Urban Affairs Committee’s Subcommittee on Economic Policy hearing to examine the student loan debt crisis in our country.
- On April 1, 2021, Congresswoman Pressley, along with Senator Elizabeth Warren and Massachusetts Attorney General Maura Healey, held a press conference calling on President Biden to tackle the student loan debt crisis.
- On February 4, 2021, Congresswoman Pressley, along with several Democratic House and Senate leaders, led their colleagues in reintroducing a bicameral resolution outlining a bold plan for President Biden to tackle the student loan debt crisis.
- On December 17, 2020, Representatives Ayanna Pressley, Ilhan Omar, Maxine Waters, and Alma Adams introduced a resolution outlining a bold plan for President-elect Joe Biden to cancel up to $50,000 in Federal student loan debt for student loan borrowers.
- On December 10, 2020, Congresswoman Pressley was in Yahoo Finance urging the Biden administration to cancel student debt, stressing the impact on Black borrowers.
- On May 8, 2020, Representatives Ayanna Pressley, Alma Adams, and Ilhan Omar, led 28 of their colleagues and sent a letter to House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy calling for the universal, one-time, student debt cancellation of at least $30,000 per borrower in the next round of COVID-19 relief legislation.
- On March 23, 2020, Representatives Ayanna Pressley and Ilhan Omar introduced the Student Debt Emergency Relief Act, legislation that provides immediate monthly payment relief for federal student loan borrowers.
- On March 17, 2020, Congresswoman Ayanna Pressley and Senator Elizabeth Warren were on The Hill calling on congressional leadership to include student debt cancellation in the next coronavirus relief package.
- On October 11, 2019, Congresswoman Pressley introduced legislation – the Ending Debt Collection Harassment Act – to protect consumers from abusive debt collection.
- On July 17, 2019, Congresswomen Pressley introduced legislation – the Student Borrower Credit Improvement Act – to provide much needed support to private student loan borrowers with a pathway to financial stability by helping them improve their credit.