Press Releases

Washington, D.C. — Today, Congresswoman Frederica S. Wilson (D-FL), U.S. Senator Elizabeth Warren (D-MA), Majority Leader Chuck Schumer (D-NY), Bernie Sanders (I-VT), Alex Padilla (D-CA), and Representatives Ayanna Pressley (D-MA.), Ilhan Omar (D-MN.) 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. 

Text of Letter (PDF)

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 exceed their original principal balance (2) borrowers who have paid their loans for over 20 or 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 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 was the initiation of a negotiated rulemaking procedure to establish an alternative debt forgiveness pathway for a 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. 

“We are encouraged by the Department’s critical efforts to provide student debt relief through negotiated rulemaking. However, we believe more must be done to improve the draft regulatory text to meet President Biden’s objective of ‘provide student debt relief to as many borrowers as possible as quickly as possible.’ The Biden Administration should take every opportunity to use the authority Congress has already given it to deliver on the promises made to student loan borrowers,” concluded the lawmakers. 

Congresswoman Wilson has led the push for student debt relief in the House of Representatives:

• In March 2023, Ranking Members Wilson and Scott reintroduced the LOAN Act which would provide urgent relief for Americans holding student loans.
• Since the start of the Biden administration, she has chaired multiple committee hearings on federal student aid policies and student debt relief.
• Congresswoman Wilson has raised the issue of student loan debt with the administration and signed numerous letters calling on the President to cancel student debt.
• In April 2022, Congresswoman Wilson introduced the Student Loan Borrower Relief Act, which seeks to cap interest rates, stop unfair lending practices, expand public service loan forgiveness programs, and protect disabled borrowers. 
• In previous years, she introduced the Student Loan Borrowers’ Bill of Rights Act a bill that helps to extend more protections for borrowers and fight back against predatory lending practices. 
• In 2014, Congresswoman Wilson and Congressman Mark Pocan (WI-02) co-introduced the Relief for Underwater Student Borrowers Act. 
• In addition to these efforts, Congresswoman Wilson introduced the Student Loan Borrowers’ Bill of Rights. 
• She has also coauthored the Student Loan Fairness Act and co-sponsored the Student Loan Relief Act.

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