The U.S. Department of Education is launching a rulemaking process that could see the agency overhaul multiple
The department, in a statement on Thursday, said it was inviting public feedback as it evaluated ways to "streamline" student-loan assistance programs, including for public-service workers and low-income borrowers, with the aim of creating "efficiencies for students, institutions, and key stakeholders."
Currently, the Education Department offers a variety of programs, based on occupation and income level, that
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The department is seeking "ideas to improve" three of those repayment plans: a public-service program that helps first responders, teachers, and nonprofit workers with their debt, the Pay as You Earn Repayment plan, which caps payments at 10% of discretionary income and forgives loans after 20 years of payments, and the Income-Contingent Repayment plan, which limits payments to 20% of discretionary income.
The changes could address persistent concerns that borrowers would be better served by a single loan forgiveness program, particularly if it kept better track of repayments. As loans change hands or are subject to deferrals, servicers can lose track of if borrowers have qualified for loan forgiveness, complicating the process.
But the administration could also use the changes to make forgiveness more difficult to obtain, after Republicans denounced broad loan relief efforts during former President Joe Biden's administration.
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In a draft document for the Federal Register, the department said it would explore changes to its determination of qualifying employers for public-service loan forgiveness. Trump previously signed an executive order looking to tighten eligibility for the special programs, seeking to disqualify borrowers who worked for nonprofits engaged in what he designated as "improper" activity.
In a statement, Acting Under Secretary James Bergeron claimed that Title IV regulations under the Higher Education Act, which authorize and administer federal student aid programs, had "driven up the cost of college and hindered innovation."
"Not only will this rulemaking serve as an opportunity to identify and cut unnecessary red tape, but it will allow key stakeholders to offer suggestions to streamline and improve federal student aid programs," Bergeron added.
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Critics of Republican efforts to reduce the number of available repayment plans say the federal government should have a vested interest in higher education, and that such initiatives are necessary to make college accessible.
The department will hold an in-person and a virtual hearing later this month and in May where stakeholders can weigh in.
The moves come with the agency itself in upheaval, with Trump having directed Secretary Linda McMahon to largely dismantle the Cabinet-level department and shift many of its functions to other parts of the government or to state and local authorities. Those changes have sparked angst among student loan borrowers, who collectively hold more than $1 trillion in debt. The department oversees federal loans held by roughly 43 million Americans, about one in six U.S. adults.
