“We welcome the Biden Administration’s actions to address shortcomings of the income-driven repayment (IDR) system, including forbearance steering and flawed payment tracking. The plans announced today will result in immediate balance cancellation for tens of thousands of borrowers under IDR and Public Service Loan Forgiveness and additionally move millions of borrowers closer to the end of their repayment term where any remaining balances will be discharged. We also applaud the Education Department’s actions to end harmful servicing practices and conduct stronger oversight of federal loan servicers.
“We urge the Department to provide full, automated relief to all borrowers affected by forbearance steering, payment tracking errors, and other administrative failures — and to provide the same relief to borrowers who have experienced loan default. The Department must also conduct robust outreach to ensure all borrowers — including those with older loans and those in default — receive all benefits to which they are entitled.
“Policymakers should also protect borrowers by making broader reforms to the repayment system by creating an IDR plan that is simpler and more generous, making significant reforms to the punitive student loan default system, and providing real bankruptcy relief for student borrowers.”
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