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Michigan

Do You Qualify for Student Debt Relief?

2023-11-12

November 12 | The Biden Administration and the U.S. Department of Education (Education) are working together to help student loan borrowers pay off college debt.

In what is known as negotiated rulemaking, the U.S. Department of Education recently invited the public to participate in a collaborative and consensus-building process to create a federal regulation that will guide who qualifies for student loan debt relief and how much they may receive in benefits. These regulations are published for public comment into the Federal Register and have the force and effect of law.

Thoughout this process, federal agencies, the public, and interested groups work together towards building consensus. Over time, they agree to a proposed rule. Thus, on October 30th and November 9th, the Biden administration and the Education Secretary Dr. Miguel Cardona set out to help student loan borrowers by outlining next steps for borrowers who may be experiencing hardship and to hold loan servicers accountable, respectively. In addition, the Education department is also strategically identifying solutions to borrower problems that include:

  • Monitoring the quality of customer service provided to borrowers by loan servicers
  • Partnering with state and federal regulators to enforce consumer protection laws
  • Leveraging borrower complaints in the news and on social media
  • Helping borrowers harmed by loan servicers by placing loans into forbearance, a temporary suspension or reduction of payments
  • Creating a modernized loan servicing system to better serve borrowers

Past negotiated rulemaking sessions can be found online where the public can review questions, read the full transcript of the meetings, and review the video recordings. In each session, those present are asked questions and try to gain support or show opposition to arrive at a decision for the proposed rule. The general public is an integral part of this process which allows for debate and aims to build consensus.

In addition, the Federal Reserve has identified multiple characteristics of student loan borrowers, such as income, loan debt, amount owed, and more. Further, the state of Michigan is moving towards satisfying the requirements of the Sixty by 30 initiative to ensure that all adult Michiganders earn a college degree or certificate by 2030. According to Governor Whitmer's office, through the federal public service loan forgiveness program, approximately 148,000 Michiganders may qualify for loan forgiveness. Even more borrowers may qualify for loan forgiveness made possible by the new student loan debt relief program authorized by the Biden administration through the Higher Education Act (HEA).

In all, the federal government has identified these borrowers for debt relief to include:

  1. Borrowers who currently have loan balances that exceed the original amount borrowed
  2. Borrowers who have loans that entered repayment over 25 years ago
  3. Borrowers who either took out loans in career-training programs that created unreasonable debt or provided insufficient earnings, and those who attended institutions with unacceptably high student loan default rates
  4. Borrowers whom Secretary Cardona determines are eligible under repayment plan programs or those who have not applied for debt relief

Those borrowers who experience hardship and the general public are invited to participate in the next (and final) session of the 2023-2024 Student Loan Debt Relief negotiated rulemaking which takes place December 11 - 12. Other sessions for this year include Oct. 10-11 and Nov. 9-10 and that information may be found on the same page.


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