Student loan reforms remain on the horizon in crafting negotiated rules
This week, the US Department of Education launched its first round of negotiations to regulate some of the biggest student loan issues that could impact millions of people. The items on the agenda being debated include the strengthening of the civil service loan forgiveness program (PSLF) as well as the cancellation of student debt for people defrauded by institutions.
“Each of the issues on the table is of critical and fairly substantial importance to specific segments of the borrower population,” said Barmak Nassirian, vice president of higher education policy at Veterans Education Success, a group bipartisan advocacy center that focuses on higher education for veterans. , military personnel and military families.
But beyond policy think tanks and advocacy groups, this process, called negotiated rule making (or neg reg), is not well known. This year, however, some experts say the neg reg has higher stakes as well as greater potential to achieve higher education reform as Congress continues to stagnate and the Biden-Harris administration seeks to to act.
“We are in a time when there is so little congressional legislation for higher education,” said Dr. Rebecca Natow, assistant professor of specialized education programs at Hofstra University. “So a lot of policy making is done through rule making, not Congress. And Department of Education regulations have a lot of influence on what happens to students and student loan borrowers.
Natow researched negotiated rule making and explained how the Department of Education process works. For several months and days at a time, the Department of Education discusses regulatory proposals issue by issue with relevant stakeholders. They can include people who represent students, state governments, and different types of higher education institutions.
“The goal is to come to a consensus on what a Notice of Proposed Regulatory Proposal, or NPRM, will say,” Natow said, adding that this post-neg reg notice is registered in the federal registry and subject to public comment. .
Still, reaching consensus during the reg neg can be rare. If everyone does not agree, the Ministry of Education can write the proposed regulation itself.
“So the department has a tremendous amount of power here,” Natow said. “They are the negotiators. They are the only party that can write the rule in the absence of consensus. That said, they do take into account the discussions. But they don’t have to use the language that has been debated unless everyone agrees.
Nassirian pointed out that one of the biggest student loan issues on the table this year is what happens to borrowers when their institutions close.
“Education is not a product you can get away with,” he said. “It’s an experience over time. Closing a school can be extremely damaging to students. We’re not talking about orderly closings that give students notice. We are talking about school doors padlocked at night. The government has both a moral and a legal responsibility for what happens to these students. “
Nassirian added that the federal government is playing a role in such closures which may leave students still in debt and without a viable degree.
“Every hasty school closure is the failure of our government,” he said. “Institutions have to be financially stable to receive financial aid or GI Bill money. And the education ministry is responsible for confirming that these are financially sound institutions. So whenever an institution closes overnight, yes, there was something wrong with the institution. But I have news for you: there was something wrong with the Department of Education for letting them in.
Another issue that has gained attention during reg neg is the ability to create a new Income Based Repayment Plan (IDR) for student loans. Monthly payments could be reduced by around 10% to 5% to help borrowers who don’t earn enough to pay off their debt.
“A lot of borrowers tell us that they can’t afford the monthly payment – or even if they can, they can’t afford the interest, and therefore their balance continues to rise,” said Michele Streeter, Associate Director of Policy and Advocacy at the Institute for College Access & Success (TICAS), a non-profit organization that studies equity and affordability in higher education.
Additionally, Streeter said the debt cancellation timeframe in IDR plans can currently be around 20 to 25 years. Defenders like her are looking to push for shorter deadlines during the reg neg.
“Some of the big conversations are about how we make sure the borrowers who need the help the most not only have access to the monthly relief, but aren’t struggling with the loan for 20 years or so.” , Streeter said.
Both Nassirian and Streeter have said they are hopeful that neg reg can make some big changes. But they added that these discussed elements do not address deeper systemic issues in higher education.
“These problems represent the triage after the disaster,” Nassirian said. “What they have to do is what to do when bad things happen. When people get ripped off. When a school collapses on them. But you’re not taking a proactive approach to designing a system that can prevent that from happening right off the bat.
If this year’s negative settlement comes to an end soon after his last round in December, Nassirian said he hoped then a second negotiated settlement would move forward with broader ambitions in the new year. Streeter also said she hopes this first round of neg reg is just the start.
“I would hate to lose momentum for broader systemic reform if we have a new IDR plan,” she said. “That’s not what we want to see at all. Ideally, we would go completely beyond a debt-financed education system. But as long as we’re in one, we want to make sure that no one has to choose between rent payments and student loan payments. It’s really important to us. “
Rebecca Kelliher can be contacted at [email protected]