This afternoon, after the Supreme Court struck down the Biden Administration’s student loan debt forgiveness plan, the Administration announced new actions to provide debt relief and support for student loan borrowers. The Secretary of Education initiated a rulemaking process aimed at opening an alternative path to debt relief, using the Secretary’s authority under the Higher Education Act. The notice announces a virtual public hearing from 10am to noon and 1 to 4pm on July 18 and solicits written comments from stakeholders on topics to consider.
Also, today the Department of Education finalized the Saving on a Valuable Education (SAVE) plan, ensuring that borrowers will be able to take advantage of this plan this summer—before loan payments are due. Many borrowers will not have to make monthly payments under this plan. Those that do will save more than $1,000 a year.
In addition, the Department is instituting a 12-month “on-ramp” to repayment, running from October 1, 2023 to September 30, 2024, so that financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.
The White House fact sheet may be accessed here. The Department of Education’s notice of its intent to establish a negotiated rulemaking committee, using the Secretary of Education’s authority under the Higher Education Act, may be accessed here.