US Secretary of Education seeks public’s feedback on plan to lower student loan debt
Secretary Miguel Cardona said, “we’re trying to fix a broken system.”
WASHINGTON (Gray DC) - For many American families and students, a college degree comes with the burden of student loan debt.
Now, U.S. Secretary of Education Miguel Cardona says he is working to fix a system that calls ‘broken.’ He’s asking the public to weigh in over the next 30 days on a new plan by the U.S. Department of Education to bring many Americans relief.
“The President made it very clear when I became Secretary. Fix the broken system so more Americans can access higher education without being buried in debt or being afraid of the process. The system was broken. Right? So this announcement is really one step to make sure that we’re keeping our borrowers at the center, we’re keeping our students at the center,” said Cardona.
The new proposed regulations zero in on stopping predatory practices and giving borrowers more options. The proposed rules also aim to stop interest capitalization which occurs when unpaid interest is added to the principal balance of a loan. The regulations also seek to widen the amount of students eligible for public service loan forgiveness.
“Public service loan forgiveness is for public servants right? Teachers, nurses, folks who choose public service not because of the money but because they want to make their community better. This was intended to give those folks loan forgiveness so that they’re not spending the rest of their lives paying off loans when they serve the public,” said Cardona. “And we’re widening the net, if you will, of those who are eligible for it. For example, there are medical doctors who choose to serve in a nonprofit hospital as opposed to going into private sector or private practice where they make more, they’re going into public service. So we want them to be eligible as well.”
Another facet of the proposal is to alleviate burdens for borrowers whose schools closed or lied to them. That includes giving borrowers more options to have a day in court if they have pending disputes with their colleges.
“We’re now protecting folks who went into this, have loans, but their schools lied to them about what they can do when they get their degree. So these folks have loans that they have to repay. The institutions that they went to misled them. We want to provide loan forgiveness to those folks as well,” said Cardona. “Another thing that I want to mention here, really important- we heard loud and clear from American people all over the country that interest capitalization is an issue. The interest that accrues on these loans often times buries these folks where they can’t get a home or they can’t move on in life because the interest has accumulated so much. We’re trying to prevent interest accumulation. We’re not trying to make money on loans here. We want our folks that get their degrees to get their education, pay off their loans in a way that they’re not tethered to them for the rest of their lives and move on with their life. That’s what we’re trying to do here with this announcement.”
Read the full details of the new proposals here.
Anyone who wants to weigh in on the new proposal, can do so on regulations.gov.
The U.S. Secretary of Education added that he urges anyone who thinks they may be eligible for public service loan forgiveness to check studentaid.gov immediately because he said they may be eligible for relief right now.
“My goal is not just to relieve some of the debt, but to fix a system that has been broken and that perpetuates the haves and the have nots in this country. So day one, public service, loan forgiveness. We fix that borrower defense. We’ve been working really hard. You heard the announcement about Corinthian. We’re simplifying the process. We’re revamping FSA (Federal Student Aid) We have an enforcement unit back up and running. The system has to be better so that more Americans can have access to it,” said Cardona.
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