WASHINGTON – President Joe Biden’s second attempt at student loan cancellation moved forward Tuesday with the first round of negotiations to help guide the administration to a new plan.
The Biden administration vowed to try again after the Supreme Court rejected an initial plan in June.
In opening remarks at Tuesday’s hearing, Undersecretary for Education 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 is suffocating college benefits for many students,” Kvaal said in a prepared speech. “Some loans made to young adults reach retirement with no hope of repayment. The burden of this debt is shared by the family and the community.”
Biden ordered the Education Department to find another way to get loan relief after conservatives on the high court ruled that he could not cancel the loans using a 2003 law called the HEROES Act.
The latest attempt will rely on sweeping legislation known as the Higher Education Act, which gives the education secretary the authority to waive student loans, though how far that authority extends is the subject of legal debate.
The Education Department hopes to resolve the dispute by adding federal rules that clarify when the secretary can waive student loans.
However, to change the rules, the department is required to assemble an outside advisory committee to help hammer out the details.
President Joe Biden speaks on 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 weaknesses of existing student loan cancellation programs or the problems caused by student loan interest.
Department officials repeatedly intervened to say the problem was not within the scope of the current process.
The consultants all come from outside the federal government and represent a variety of viewpoints on student loans. The panel included students and officials from various colleges, along with loan servicers, state officials and advocates including the NAACP.
It’s unclear who is eligible for amnesty under the new plan and how much relief they will get. Those details will be decided after the administration takes input from consultants, who meet in a series of sessions scheduled to continue through December.
Responding to recommendations from the panel, administration officials said they were not considering a blanket cancellation.
“We are not looking at a widespread debt cancellation where we will write off the debt in its entirety. We’re looking at how individual secretaries can use the authority to grant waivers,” said Tamy Abernathy, who heads the policy group at the department.
He then explained that the department’s next proposal “may cancel some borrowers’ debts completely, but it cannot cancel all borrowers’ debts completely.”
At the end of the process, the negotiators will vote on a proposed rule formulated with input from their discussions. If they reach consensus on the proposal, the department will move forward with it. If not, the agency will propose its own plan, which could be finalized after a public comment period.
The Department of Education routinely uses negotiated rulemaking to enact federal regulations, and it is required for any regulations related to student financial aid. It can be a long and painstaking process, and often ends without consensus among negotiators.
Biden has called for a new plan to help “as many borrowers as possible,” but it’s unclear whether it will be as broad as his first proposal. The plan would cancel up to $20,000 in federal student loans for borrowers with incomes below $125,000 or couples below $250,000.
People demonstrate outside the Supreme Court, Friday, June 30, 2023.AP
Republicans opposed the repeal, saying it would add unfair benefits 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 will have at least an associate’s degree, along with 15% who went to college but don’t have a degree, according to the Census Bureau.
The administration plans to finalize the new rules next year, but Education Secretary Miguel Cardona declined to say whether they will be implemented before next fall’s presidential election. In a recent interview with The Associated Press, he said he was working “as fast as possible.”
He also stated that the court’s decision “needs to take into account the steps we take to move forward.”
Some legal analysts see the court’s decision as a rejection of any mass repeal without action from Congress. The court concluded that the secretary of education had the authority “to make modest adjustments and additions to existing provisions, not to change them.”
As a starting point for the negotiators, the Department of Education published an issue paper outlining some of the key questions to be debated. It offers few clues about the department’s vision for loan cancellations, but it identifies five groups of borrowers who may need help.
The consultant was asked how the agency should help:
- Borrowers whose interest increases until their balance exceeds the amount they originally owed;
- Those who qualify for loan cancellation under an existing income-based repayment plan but do not apply for the program;
- Those who borrowed loans to attend college programs that did not lead to employment with sufficient income to repay their loans;
- Borrowers with old loans taken out before Congress created benefits meant to ease the burden of student debt;
- Those who face hardships “that the current student loan system does not adequately address.”
It also asks the consultant to discuss the types of factors that qualify for loan cancellation.
The paper notes that, when deciding whether to collect a debt, some other federal agencies consider whether it “would be contrary to equity and good conscience,” or if it would “impose financial hardship.”
At a White House briefing last week, Biden drew attention to the problem of heightened interest.
Many college graduates have been making payments for years, he said, “but because of the interest, they still owe more than they originally borrowed.”
“My administration is doing everything it can to deliver student debt relief to as many people as we can, as quickly as we can,” Biden said.
The negotiators will meet virtually for two-day sessions on November 6 and December 11.
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Source: thtrangdai.edu.vn/en/
