BOSTON – Today, the Department of Education announced it would be proposing new rules to provide relief to federal student loan borrowers based on financial hardship, consistent with the recommendations of a federal rulemaking committee.
Kyra Taylor, staff attorney at the National Consumer Law Center and member of the rulemaking committee, issued the following statement in response to the Department’s announcement:
“Clearing the books of bad debts will provide relief to borrowers drowning in student loan debt, and it will help the federal government be better stewards of the student loan system.
“During the rulemaking, it became apparent that millions of borrowers simply cannot afford their federal student loan debt, leaving them trapped in default and the financial devastation that brings to borrowers, their families, and their communities. The student loan system is bloated with debts that will never be repaid, and the ongoing efforts to collect these bad debts endanger the Department of Education’s ability to adequately service the rest of the student loan portfolio.
“I am encouraged that the Biden Administration is proposing relief for currently distressed borrowers consistent with the rulemaking committee’s recommendations. This proposal creates a pathway to ensure that student loan borrowers won’t languish under the weight of their student loan debt going forward.”
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