As the federal government teeters on the edge of a shutdown, the U.S. Department of Education said Friday it is still moving forward with a regulatory effort to cancel broad amounts of student loan debt.
The new venture follows the Biden administration suffering a major legal defeat this summer. The U.S. Supreme Court struck down its initial loan forgiveness plan, which would have immediately wiped out up to $20,000 in student debt for individual borrowers earning less than $125,000. The Education Department estimates the program would have benefited 43 million borrowers.
Now, the White House is pursuing loan forgiveness through what will likely be a much lengthier process known as negotiated rulemaking, which brings together parties affected by regulatory changes to find common policy ground.
However, the individuals involved in negotiated rulemaking — whom the Education Department revealed Friday — will likely need to meet several times to hash out these details. And the policy they agree on will still need to go through a separate regulatory process that could take months, calling into question whether President Joe Biden will even be in office by the time the work concludes.
Other barriers to loan relief include whether the administration will be sued over it again. Pundits predict if a hypothetical lawsuit reached the conservative-dominated Supreme Court, it would again rule against a loan forgiveness plan.
This is all occurring against the backdrop of monthly student loan payments restarting in October, for the first time in years since a pandemic-era pause was enacted. The looming government shutdown will assuredly complicate that transition, and the Education Department confirmed borrowers still must pay during that time.
“Extreme House Republicans need to stop playing political games with people’s lives and abide by the bipartisan agreement to keep the government open,” Zayn Siddique, principal deputy director of the White House Domestic Policy Council, told reporters in a phone call Friday.
What is negotiated rulemaking?
Negotiated rulemaking, often shortened to “neg-reg,” has been dubbed a deeply dull process, because participants must work through minute policy details, all of which require consensus.
This process isn’t always amicable — so while the Education Department has turned to negotiated rulemaking quite a bit since 1998, in recent years it has also skipped the process to release draft regulations.
If negotiators can’t agree, either, then the Education Department will just release its own draft rule.
Those involved in the new round of neg-reg will first meet in mid-October. They will debate how the administration could proceed with loan cancellation under the Higher Education Act, the most prominent vehicle for federal higher education policy.
The Education Department has posed several questions for negotiators, federal officials said Friday.
It wants to know how to help certain borrowers, such as those who did not attend a college that provided “sufficient” financial value. The Biden administration has prioritized holding poor-performing colleges, namely for-profits, accountable. It recently released its final version of what’s known as the gainful employment rule, which requires that proprietary institutions pass debt-to-earnings tests to be eligible for federal aid.
The department also wants to assist those who are eligible for loan forgiveness under programs like income-driven repayment but never applied for them, and those who have seen their balances grow larger than their original loan because of interest accrual.
Agency leaders are also discussing general hardships borrowers might face, and borrowers who took out loans many years ago and couldn’t take advantage of federal benefits that now exist to repay them, like income-driven plans.
“The Biden-Harris Administration has taken unprecedented action to fix the broken student loan system and deliver record amounts of student debt relief,” U.S. Education Secretary Miguel Cardona said in a statement. “Now, we are diligently moving through the regulatory process to advance debt relief for even more borrowers.”
Who's at the table?
Education Department officials published a list of the chosen negotiators Friday. Each individual represents a particular faction of higher ed and has an alternate negotiator who can step in for them. Only the primary negotiators are listed here:
- Wisdom Cole, national director of the NAACP’s Youth and College Division.
- Kyra Taylor, staff attorney at the National Consumer Law Center.
- Lane Thompson, student loan ombuds at the Oregon Department of Consumer and Business Services.
- Yael Shavit, chief of the Consumer Protection Division of the Massachusetts Attorney General's Office.
- Melissa Kunes, assistant vice president for enrollment management and executive director for student aid at Pennsylvania State University.
- Angelika Williams, assistant vice provost of student financial services at the University of San Francisco.
- Kathleen Dwyer, vice president of operations and regulatory affairs at Galen College of Nursing.
- Sandra Boham, president of Salish Kootenai College.
- Scott Buchanan, executive director of the Student Loan Servicing Alliance.
- Ashley Pizzuti, a student loan borrower who attended San Joaquin Delta College.
- Sherrie Gammage, a student loan borrower who attended the University of New Orleans.
- Richard Haase, a student loan borrower who attended the State University of New York at Stony Brook.
- Jada Sanford, a student at Stephen F. Austin University.
- Michael Jones, a veteran.
The Education Department is still seeking two alternate negotiators — someone who could represent state regulators in Thompson's place, and another from minority-serving institutions like historically Black colleges and universities if Boham becomes unavailable.