Richard Cordray, Chief Operating Officer of Federal Student Aid, reviewed the status of broad student loan forgiveness during a U.S. Department of Education conference for college financial aid administrators.
Richard Cordray said that he will not say anything about broad student loan forgiveness, which he called general loan forgiveness, leaving any decisions to the White House.
He did discuss Federal Student Aid’s efforts regarding targeted loan forgiveness and the restart of repayment of federal student loans in February 2022.
Targeted loan forgiveness includes U.S. Department of Education efforts concerning automated disability discharge, borrower defense to repayment discharge, and the Public Service Loan Forgiveness (PSLF) waiver. The PSLF waiver allows payments made in the FFEL program and in any repayment plan to count toward PSLF, if the borrowers consolidate their loans and/or file a PSLF form through October 31, 2022.
Finally, Richard Cordray discussed the U.S. Department of Educations regarding the restart of repayment of federal student loans in February 2022. These include direct and indirect communications to borrowers, making it easier for borrowers to renew or sign up for auto-debit, and encouraging struggling borrowers to sign up for income-driven repayment.
This is a transcript of the relevant section of Richard Cordray’s remarks:
“Finally, let me address a topic that’s being widely discussed right now, which is student loan forgiveness. To be more precise for our purposes today, it’s really three different but related topics: general loan forgiveness, targeted loan forgiveness programs and the return to repayment.
On general loan forgiveness, many people seem to have a great deal to say, but as the chief of FSA, I do not. Instead, I will simply say it is a decision for the White House to make, not for me. And, whatever they decide, FSA will faithfully implement.
Targeted loan forgiveness programs are a different matter altogether. We are deeply involved in several areas here.
During the summer the Department announced that more than $5.8 billion of Total and Permanent Disability discharges would be granted to several hundred thousand borrowers through a data match with the Social Security Administration. We are working to make that happen.
The Department has also announced multiple rounds of borrower defense discharges for students who have been victimized by failed for-profit schools and we are executing on those discharges as well.
Recently, the Department announced dramatic changes to the Public Service Loan Forgiveness program. As you know, PSLF has been a hot topic in recent years and has been a source of frustration for many borrowers.
Under a program expansion that the Secretary recently announced, PSLF will reach a broader audience of qualified borrowers, most notably Federal Family Education Loan or FFEL program borrowers who had not previously received any credit for years of payments made on those loans. The goal here is to deliver on the core promise of full loan forgiveness to public servants, servicemembers, teachers, nurses, police officers, firefighters and others who have chosen to put their communities before themselves.
A program that so far had delivered relief only to a few thousand recipients, now will expand to reach many more, including hundreds of thousands of borrowers who are seeing their payment counts move forward to the magic ten-year mark to discharge their loans. As you might surmise, FSA is hard at work to carry all this out.
With all these opportunities for student loan relief, I ask for your help in spreading the word. Visit studentaid.gov/announcements for the latest news. Amplify it within your circles and raise any questions or concerns with us so we can address them together. Our customers, the borrowers we serve, are relying on us to deliver for them and we will.
These days I find I cannot talk about FSA’s work without putting a spotlight on what we call Return to Repayment. This is the most pressing issue we face right now.
Tens of millions of student loan borrowers have had their loan payments suspended during the pandemic. Most have made no payments since March 2020. That has been welcome relief, no doubt. But after multiple extensions of the payment pause, the final date to return to repayment has been set now for January 31, 2022.
We recognize that the stakes are extremely high as we face this challenge. Let me tell you how we at FSA intend to approach this task. We will focus on supporting borrowers and their families with clear communications and with an emphasis on execution by our loan servicers.
On the first point, to help people prepare to return to repayment, FSA is executing a communications campaign that includes: a series of email communications direct to borrowers, general awareness messaging on various forms of social media, paid search which will advertise federal student loan resources and information within the results of internet search engines, and working with groups of all kinds – community groups, alumni associations, labor unions, professional organizations, many of you – to share information and spread the word.
We are informing borrowers about their options, such as signing up or renewing their enrollment in our auto-debit program. which is the easiest way to make their monthly payments.
We also are encouraging borrowers to sign up for income-driven repayment plans, if they need help making their monthly payments more affordable.
But FSA cannot do this alone. We need strong partners like you to be effective. You do not want to see your cohort default rates spike because borrowers are confused or reluctant to start repaying their loans again, some of them for the first time ever. It is not a positive for any borrower to slip into delinquency and then default, regardless of the reasons. We need all of you to help people get this right.
There is nothing abstract about the challenges we face. The students, families and borrowers we serve are you and your children. They are me and mine. For example, this spring my wife and I had the distinct pleasure of watching our twins receive their college diplomas. I’m sure you can appreciate the emotions that parents feel when they see their children reaching a milestone that took many years of dedication and effort to achieve. The higher education they receive will help them succeed in handling the challenges that life is sure to throw at them.
By virtue of the work we do, we share the goal of helping more young people seize the same opportunities to learn, and grow, and flourish. We can change the trajectory of their lives by helping them realize fulfilling and productive careers.
If we can do that, we also will strengthen the capacity of American society to meet the global challenges that we face today and in the coming years. As each student succeeds, we all succeed.
This idea is ingrained in the mission of FSA, which is, at its core, to enable the American dream. So, that is what we must aim to do, together.“