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☆ A top education official breaks down what's next for student-loan borrowers, and how the industry's 'deep-rooted structural problems' can be fixed
▼ + stars: | 2023-10-03 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +6 min

James Kvaal knew the student-loan industry had problems when he started as Under Secretary of Education. Lack of funding for Federal Student Aid is also concerning for repayment, Kvaal said. AdvertisementAdvertisementA top official in the US Department of Education knew the student-loan industry was broken when he started the job. At that point, Americans were in the midst of the pandemic, and as a result, student-loan borrowers had not been required to pay their bills since March 2020. Kvaal pointed to limited resources the Education Department has to give to federal student-loan servicers, which he said has contributed to mismanagement over the years.

Persons: James Kvaal, Kvaal, —, Education James Kvaal, Joe Biden's, servicers, we've, Massachusetts Sen, Elizabeth Warren, Warren, It's, What's, rulemaking Organizations: Education, Federal Student, Service, US Department of Education, Public, Education Department, Massachusetts, Democratic, Aid, —, Republicans, Higher, Federal

☆ Student-loan borrowers struggling with repayment should not be required to pay their debt until their account issues are resolved, 19 state attorneys general say
▼ + stars: | 2023-10-02 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Pandemic relief for student-loan borrowers is officially over. State attorneys general said those borrowers shouldn't have to make payments until the issues are fixed. AdvertisementAdvertisementA group of state attorneys general don't think student-loan borrowers should have to pay off their loans while struggling to get issues with their balances resolved. Interest also started building on balances in September due to the debt ceiling bill Biden signed into law in June that codified the end of the student-loan payment pause. Over the past few months, borrowers have increasingly been struggling with their servicers as they began to prepare for repayment.

Persons: —, Joe Biden, Miguel Cardona, servicers, Biden, Education James Kvaal, MOHELA Organizations: Service, Education, Student Aid, Democratic, The Education Department

☆ It is 'abundantly clear' student-loan payments should not resume next week if the government shuts down, Ayanna Pressley says
▼ + stars: | 2023-09-27 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +3 min

That's the same day student-loan payments are set to resume. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . AdvertisementAdvertisementRep. Ayanna Pressley does not want student-loan borrowers to worry about repayment and a government shutdown at the same time. With that deadline just days away, that prospect is looking increasingly likely — and it would also fall the same day federal student-loan borrowers could start facing monthly bills again after an over three-year pause. Pressley said in a Wednesday statement that President Joe Biden should pause student-loan payments and interest accrual if a shutdown does happen, and that "it is abundantly clear that student loan payments should not resume October 1."

Persons: Pressley, —, Ayanna Pressley, Joe Biden, servicers, Biden's, Biden, Education James Kvaal Organizations: Service, Education, The Education Department, Republican, Education Department

☆ Student-loan borrowers have a new safeguard in place to ensure their debt doesn't pile up once they graduate
▼ + stars: | 2023-09-27 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +5 min

The Education Department released its final version of the gainful employment rule. AdvertisementAdvertisementPresident Joe Biden's Education Department has released its final rule to keep student debt from spiraling after a borrower graduates. On Wednesday, the Education Department announced its final version of the gainful employment rule. However, advocates and Democratic lawmakers have previously pushed for a strengthened gainful employment rule to protect borrowers. This includes the most effective gainful employment rule in history," Cardona said.

Persons: —, Joe Biden's, Barack Obama, Donald Trump, Education James Kvaal, Jason Altmire, Altmire, Aaron Ament, Miguel Cardona, " Cardona Organizations: Education Department, Service, Joe Biden's Education Department, Education, Education Colleges, Universities —, Department, Democratic, Student Defense

☆ There's no proof that student-loan companies are prepared to bring millions of borrowers back into repayment in under 2 weeks, 2 top Republican lawmakers say
▼ + stars: | 2023-09-20 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Rep. Virginia Foxx and Sen. Bill Cassidy asked the GAO to investigate the student-loan payment resumption. They said they're concerned loan servicers are not adequately prepared to facilitate repayment. The student-loan payment pause officially ended on September 1 when interest began accruing again on federal borrowers' balances, and bills will start becoming due next month. Additionally, Cassidy and Foxx said that it is "unclear whether borrowers will begin repayments when billing statements resume. In other cases, there will be borrowers who will take some time to work student loans back into their household budgets."

Persons: Virginia Foxx, Sen, Bill Cassidy, they're, Bill Cassidy —, —, Foxx, Cassidy, servicers, Education James Kvaal, Kvaal Organizations: Service, Office, Education, Education Department, GAO, Public Locations: Wall, Silicon

☆ Student-loan repayment is about to be 'more affordable than ever before' through a new plan that will cut monthly payments to $0 for those making under $15 an hour, Biden's Education Department says
▼ + stars: | 2023-08-22 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +5 min

Biden officially launched the new income-driven student-loan repayment plan, known as the SAVE plan. On Tuesday, Biden's administration announced that student-loan borrowers can now officially enroll in the Saving on a Valuable Education, or SAVE, plan, after it began beta testing the program in July. "The SAVE plan is a sea change for students, making college loans far more affordable than ever before," Under Secretary of Education James Kvaal said in a statement. Borrowers who are currently enrolled in the REPAYE plan will automatically have their monthly payments adjusted to the new SAVE plan before payments restart." AdvertisementAdvertisement"The SAVE plan is a game changer," Education Secretary Miguel Cardona told reporters on a Monday press call.

Persons: Biden, Joe Biden, Biden's, Education James Kvaal, Miguel Cardona, we're Organizations: Service, Valuable Education, Education Department, SAVE, Education, Federal, Internal Revenue Service, NAACP Locations: Wall, Silicon

☆ Over 800,000 student-loan borrowers are set to start seeing their debt wiped out following income-driven repayment reforms
▼ + stars: | 2023-08-14 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Over 800,000 student-loan borrowers are set to start seeing their debt wiped out. It's part of a one-time account adjustment for borrowers on income-driven repayment plans. The future of the relief is uncertain after conservative groups filed a lawsuit to block it. On Monday, student-loan companies are set to begin discharging the debt of 804,000 borrowers who have qualified for $39 billion in debt relief — part of the first batch of borrowers affected by the Education Department's one-time account adjustment for income-driven repayment plans. "At the start of this Administration, millions of borrowers had earned loan forgiveness but never received it.

Persons: Education James Kvaal, Joe Biden's Organizations: Service, Education, New Civil Liberties Alliance, Cato Institute, Mackinac Center for Public, Public, Education Department Locations: Wall, Silicon

☆ Student-loan borrowers could be waiting over a year for Biden to implement his new plan for broad debt relief
▼ + stars: | 2023-07-22 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +5 min

Biden is going through negotiated rulemaking to implement his new student-debt relief plan. It recently took his Education Department 15 months to go through that process. The law says the Education Department can "enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand" related to federal student debt. That process has historically taken a long time, meaning that the new attempt at broad student-debt relief may not arrive for a while. Of course, the timeline for this new plan for student-debt relief could be quicker, and Education Department officials have said they will work as fast as they can under the process to get relief to borrowers.

Persons: Biden, Joe Biden's, Education James Kvaal Organizations: Department, Service, Education Department, Higher, Biden overreached, Federal, Education, guaranty, servicers, Federal Register Locations: Wall, Silicon

☆ It's a 'grave mistake' for Biden to resume student-loan payments without first giving borrowers debt relief, 179 advocacy groups say
▼ + stars: | 2023-07-19 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Student-loan payments are set to resume in October without broad debt relief. Nearly 200 organizations called on Biden to deliver relief before payments resume. Biden has started the process to enact debt relief again, but it could take months. But payments are still scheduled to resume in October, and the advocacy groups do not want borrowers to foot another bill without any relief. However, interest would still accrue during that time, so borrowers' balances would still grow — and even more so without any broad debt relief.

Persons: Biden, NAACP —, Joe Biden, —, Education James Kvaal, Virginia Foxx Organizations: Service, Protection Center, NAACP, Education Department, Higher, Administration, —, Education, Republican Locations: Wall, Silicon

☆ Biden's administration just kicked off the process to get student-loan forgiveness to millions of borrowers, vowing to 'work as quickly as possible under the law'
▼ + stars: | 2023-07-18 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

The Education Department on Tuesday held its first public hearing on its new student-debt relief plan. It comes after the Supreme Court struck down Biden's first route for debt relief in June. Biden is attempting to use the Higher Education Act of 1965, which will take longer than the first plan. We will help as many borrowers as possible, and we will work as quickly as possible under the law." "Taxpayers just got sucker punched – again – by this administration," top Republican on the House education committee Virginia Foxx said after Biden announced the new plan for relief.

Persons: Biden, Joe Biden's, Education James Kvaal, Kvaal, –, Virginia Foxx Organizations: Department, Service, Education Department, Higher, Education, Democratic, Republican, Taxpayers Locations: Wall, Silicon

☆ Student-loan borrowers can tell Biden what they want from his new debt relief plan. Here's how.
▼ + stars: | 2023-07-17 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Student-loan borrowers have a few days left to submit comments on Biden's new debt relief plan. Biden is beginning a new process for relief after the Supreme Court struck down his first plan. On June 30, the Supreme Court struck down Biden's plan to cancel up to $20,000 in student debt for federal borrowers. Anyone can submit a comment on the federal register through July 20 regarding anything they want the department to consider related to its new debt relief plan. Along with the opportunity to submit public comments, the Education Department is holding the first public hearing on the new debt relief plan on Tuesday.

Persons: Biden, didn't, Joe Biden's, —, Bharat Ramamurti, Education James Kvaal Organizations: Service, Education Department, Higher, National Economic Council, Education Locations: Wall, Silicon

☆ Biden's Education Department just released its 'strongest-ever' plan to ensure student-loan borrowers don't graduate with unaffordable debt
▼ + stars: | 2023-05-17 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +6 min

The Education Department released its new proposal for a strengthened gainful employment rule. The rule would place safeguards for borrowers to ensure they don't take on more student debt than they can afford. "Ever since the Trump Administration illegally repealed the 2014 Gainful Employment rule, students have been left unprotected from predatory higher ed profiteers," Ament said. The gainful employment rule has drawn criticism from for-profit schools in the past who have argued that they were being targeted by the strengthened regulations. Democratic lawmakers have previously pushed for a strengthened gainful employment rule.

☆ 37 million student-loan borrowers will get 'the most affordable repayment plan ever' when new contracts with 5 companies go into effect next year, Biden's Education Department says
▼ + stars: | 2023-04-25 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

The Education Department awarded five student-loan companies new contracts to overhaul debt repayment. The department said the contracts will deliver "major improvements" for student-loan borrowers. "This additional funding is essential to support students and student loan borrowers," the press release said. But the Republican-controlled House is unlikely to approve more funding to facilitate student-loan programs. Speaker of the House Kevin McCarthy, for example, proposed cutting spending for the Education Department to prohibit it from implementing student-loan forgiveness and creating a new income-driven repayment plan in his debt ceiling bill.

☆ Biden could protect student-loan borrowers from being stuck with useless degrees and a lot of debt by bringing back a rule Trump ditched, progressive lawmakers say
▼ + stars: | 2023-04-03 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +5 min

It included reinstating and strengthening the gainful employment rule, which protects student-loan borrowers from unaffordable debt post-graduation. Biden delayed implementation of the rule until 2024 and is expected to put out a proposal this month. "The Gainful Employment rule is a cornerstone of our ambitious regulatory agenda," the spokesperson said. Along with reinstating gainful employment, lawmakers and advocates have also called for the executives of for-profit schools to be held liable for costs when the school shuts down, rather than taxpayers and borrowers. Now, lawmakers and advocates await the department's gainful employment proposal.

☆ Elizabeth Warren wants Biden's Education Department to go beyond broad student-loan forgiveness and crack down on the institutions that cause borrowers' debt loads to spiral
▼ + stars: | 2023-03-27 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +7 min

Sen. Elizabeth Warren sent a letter to the Education Department with recommendations to better protect student-loan borrowers. Biden's Education Department has reformed the borrower defense to repayment, which are claims students can file if they believe they were defrauded by the school they attended. In her letter, Warren urged Cardona to ensure predatory schools cannot receive federal aid. It aimed to prevent students from borrowing federal loans for programs they probably wouldn't be able to pay off. But in 2010, former President Donald Trump repealed the rule, and Biden's Education Department pushed off reinstating it until 2024.

☆ Canceling student debt for millions of borrowers 'cheated by for-profit colleges' isn't enough, Biden's Education Department says — it's time for the top executives to pay up
▼ + stars: | 2023-03-06 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

The Education Department released new guidance to hold executives of for-profit colleges financially liable for unpaid costs to the government. When a school shuts down or is accused of fraud, taxpayers or students often pay the costs. Last week, the Education Department released new guidance on implementing the Education Secretary's authority to hold executives of private colleges financially liable for the cost of unpaid debts defrauded students took on. "The Biden-Harris Administration is canceling the loans of more than a million borrowers cheated by for-profit colleges. But too often, the owners and executives of these colleges escape liability," Under Secretary of Education James Kvaal said in a statement.

☆ We just got a fresh sign that Biden's plan to give millions of student-loan borrowers who fell behind on payments a shot at debt relief is working
▼ + stars: | 2023-02-16 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

The New York Fed found that $34 billion in delinquent student loans were marked current in the last quarter of 2022. That's thanks to Biden's "Fresh Start" plan, which aimed to restore defaulted borrowers to good standing. The plan will remain in place for a year after student-loan payments resume. In fact, student-loan borrowers who were previously behind on their payments — or delinquent — saw their conditions improve in the last quarter thank to President Joe Biden's "Fresh Start" plan. Student-loan payments are currently set to resume 60 days after June 30, or 60 days after the lawsuits blocking Biden's broad debt relief are resolved, whichever happens first.

☆ Elizabeth Warren and Bernie Sanders want 'immediate action' to implement a rule that would keep student-loan borrowers' debt from piling up after they graduate
▼ + stars: | 2023-02-13 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +5 min

Warren and Sanders joined 6 of their colleagues in calling for a strengthened gainful employment rule. The rule would cut off federal aid to schools that offer programs that leave students with more debt than their degree can pay off. Trump repealed the rule, and Biden has since delayed its timeline to reinstate it. Advocates have also pushed for the reinstatement of the rule, along with other measures to prevent schools from offering degrees that won't pay off post-grad. A department spokesperson told Insider last year that the "administration is committed to preventing a future student debt crisis by holding colleges and universities accountable if they leave students with mountains of debt or without good jobs."

☆ The Education Department 'failed to protect some of the most vulnerable student-loan borrowers' who had their wages stripped from them illegally during the pandemic, Elizabeth Warren says of a new 'al
▼ + stars: | 2022-12-15 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +5 min

A new Student Borrower Protection Center report found illegal wage garnishment for student-loan borrowers during the pandemic. Wage garnishment happens when student-loan borrowers falls behind on payments by more than 27o days, considered to be in default. The Education Department has not commented publicly on this report, but is has announced steps to help borrowers in default. But until that change is fully implemented, advocates argue debt collection practices should not resume. "If ED can't guarantee that its debt collection tool can comply with consumer protections, it should never turn this machinery on again."

☆ Student-loan borrowers who are behind on payments can avoid facing collections for one year after the payment pause ends. Here's how Biden's Education Department wants to make sure companies holding t
▼ + stars: | 2022-12-05 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +3 min

introduced its "Fresh Start" plan, which would help defaulted student-loan borrowers. Last week, the department released updated guidance to the agencies that hold those borrowers' debt. Borrowers will have one year after payments resume to make use of the program. According to Cordray's guidance, the agencies that hold defaulted student-loan borrowers' debt will be required to suspend collection attempts for borrowers in the Fresh Start program for a year following the end of the payment pause. Along with guidance to the guaranty agencies, borrowers in default will also need to take action to return to good standing.

☆ Student-loan borrowers should not be 'scammed out of an education and into a mountain of debt,' 3 Democratic lawmakers say. Here's how their new bill would help prevent that.
▼ + stars: | 2022-12-01 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Three Democratic lawmakers introduced a bill to increase oversight of for-profit colleges. The bill would create a committee to oversee the industry and monitor potential predatory behavior. For-profit schools have come under scrutiny for loading students up with debt they cannot pay off. "We cannot let this industry continue to take advantage of students without proper federal oversight." Along with Democratic lawmakers, President Joe Biden's Education Department has taken steps to increase oversight over the for-profit industry.

☆ Millions of student-loan borrowers risk a 'financial catastrophe' if Biden doesn't 'immediately' extend the debt payment pause, 225 advocacy groups say
▼ + stars: | 2022-11-21 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +3 min

Over 200 advocacy groups urged Biden to extend the student-loan payment pause on Monday. After two federal courts blocked the relief, they said borrowers should not have to face payments. Two conservative lawsuits have blocked indefinitely the president's plan to forgive up to $20,000 in student loans for federal borrowers. The advocacy groups argued that until borrowers receive the relief they were promised, they cannot be forced back into repayment. The administration also appealed to a lower court the federal judge in Texas' decision to block the relief two weeks ago.

☆ Biden's administration just made it easier for student-loan borrowers to get rid of their debt in court
▼ + stars: | 2022-11-17 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +6 min

The Education and Justice Department released new guidance on bankruptcy for student-loan borrowers. The guidance gives federal borrowers an easier path to relief by making the process more transparent. On Thursday, President Joe Biden's Education and Justice Departments released new guidance on the pathway for student-loan borrowers to get rid of their debt through bankruptcy. While the undue hardship standard still exists, it's an improvement in that the clear guidelines will allow for consistent treatment of loan discharges. It also gives the Justice Department clear standards for recommending relief to the judge without having to go through time-consuming investigations, per the press release.

☆ Biden will ask the Supreme Court to allow his student-loan forgiveness plan to move forward after lower courts blocked the relief
▼ + stars: | 2022-11-17 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +2 min

The 8th Circuit Court blocked Biden's student-debt relief from moving forward on Monday. On Thursday, the Justice Department said it's planning to ask the Supreme Court to reverse that decision. It also appealed another ruling from a Texas judge who declared the debt relief illegal. On Thursday, Politico first reported that the Justice Department is planning to ask the Supreme Court to allow Biden's debt relief plan to move forward. Supreme Court Justice Amy Coney Barrett has already dismissed two requests from different conservative lawsuits that were seeking to block Biden's debt relief, but it's unclear how the Court will rule on the lawsuits Biden's administration is challenging given the lower courts' decisions to block the debt cancellation.

☆ Biden's Education Department says it's 'examining' extending the student-loan payment pause to remedy the 'significant confusion' among borrowers after federal courts blocked debt relief
▼ + stars: | 2022-11-16 | by ( Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

The Education Department said it is "examining" extending the student-loan payment pause. This comes after two federal courts blocked the department from implementing debt relief. "Most borrowers have been told that all they need to do is submit an application to obtain one-time student loan debt relief. Now, as a result of litigation they are left to wonder when, if at all, if debt relief will be effectuated. Advocates and some Democratic lawmakers have been amplifying their calls to extend the payment pause in recent days.

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