Borrowers, legal‑aid groups warn proposed repayment and loan‑cap changes could harm millions
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Summary
Borrower advocates and legal aid groups at the Department of Education hearing urged preserving automatic IDR protections, rehabilitation pathways, and deferments, and warned that phasing out existing income‑driven plans and Graduate PLUS loans could raise defaults and limit access to graduate education.
Advocates and individual borrowers used the Department of Education’s negotiated‑rulemaking hearing to press for protections as the department implements statutory changes to repayment plans and loan limits.
Multiple witnesses asked the department to preserve elements of the 2023 SAVE rule and other income‑driven repayment (IDR) features. Jennifer Zhang of the Student Borrower Protection Center urged maintaining existing income‑contingent repayment plans through July 1, 2028, restoring automatic enrollment and credit for pre‑consolidation payments, and ensuring defaulted borrowers can access IDR. Abby Schaproth of the National Consumer Law Center reiterated recommendations to restore automatic enrollment, annual recertification, and easier rehabilitation that does not expose borrowers to overlapping involuntary collections.
Individual testimony underscored the stakes. Valerie Scott, a veteran who testified about attending Argosy University, described being sold on an $80,000 cost estimate but borrowing $267,000 and now owing "over $400,000," and urged the department to provide relief. Other borrowers described long‑running loans, interest burdens and confusion about eligibility for forgiveness pathways; one witness said his eligibility for a 20‑year forgiveness timeline was revoked without notice.
Advocates warned that statutory changes that eliminate Graduate PLUS, impose annual and lifetime borrowing caps, or remove deferments such as unemployment and economic hardship would push more borrowers into private credit, raise default risk, and reduce access to critical professions that rely on graduate training. Sabrina Kalazan of the Student Debt Crisis Center said eliminating these options "would cause extreme harm" and could force students to abandon graduate programs like law and medicine.
Department officials and institutional representatives acknowledged legal and statutory constraints but did not announce any departmental rollbacks during the hearing. The department invited written comments and said it would use the negotiated rulemaking process to resolve implementation details.
Ending: The hearing produced no regulatory changes; advocates urged the department to prioritize borrower protections during the negotiations and to publish clear guidance and timelines for affected borrowers.