Negotiated Rulemaking - 12/07/21

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 DEPARTMENT OF EDUCATION

 OFFICE OF POSTSECONDARY EDUCATION

 AFFORDABILITY AND STUDENT LOANS COMMITTEE 

 NEGOTIATED RULEMAKING SESSION 3, DAY 2, MORNING

December 7, 2021

On the 7th day of December, 2021, the

following meeting was held virtually, from 10:00 a.m.

to 12:00 p.m., before Jamie Young, Shorthand Reporter

in the state of New Jersey.
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P R O C E E D I N G S

MS. MACK: Good morning, everyone, my 

name is Kayla Mack, and I want to welcome you all to 

session three day two of the Department of Education's 

Negotiated Rulemaking with the Affordability and Student 

Loans Committee. I want to begin today with recognizing 

the participants from the Departments, the Committee and 

the Advisors. We are going to ask that everybody turn 

themselves on mute so that we get no background 

feedback. Thank you for that. And if you haven't changed 

your naming convention already, folks, please do that as 

we go through the roll call as well. On behalf of the 

Department, our Federal Negotiator, Jennifer Hong. Good 

morning.

MS. HONG: Good morning. 

MS. MACK: We have from the 

Department's Office of General Counsel, Brian Siegel. 

Good morning, Brian.

MR. SIEGEL: Good morning. 

MS. MACK: And I believe that we have 

Ms. Vanessa Gomez joining us from the Department to 

assist us with document sharing and live editing. Good 

morning, Vanessa.

MS. GOMEZ: Good morning, everyone.

MS. MACK: Alright, thank you, 
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Department. Now let's recognize our esteemed committee 

members. For the constituency group of accrediting 

agencies, we have our primary Dr. Heather Perfetti.

Dr. PERFETTI: Good morning, everyone. 

MS. MACK: And we have our alternate 

Dr. Michale McComis.

DR. MCCOMIS: Good morning, everyone.

MS. MACK: Good morning, Michale. For 

our constituency group of dependent students, we have 

our primary Ms. Dixie Samaniego.

MS. SAMANIEGO: Good morning, 

everyone. 

MS. MACK: Hi, Dixie, and I do want to 

recognize the alternate Mr. Greg Norwood, who will not 

be joining us for today. For the constituency group of 

federal family education, loan lenders and/or guarantee 

agencies, we have our primary Ms. Jaye O'Connell.

MS. O'CONNELL: Morning.

MS. MACK: Good morning, Jaye, and we 

have our alternate Mr. Will Shaffner.

MR. SHAFFNER: Good morning, everyone.

MS. MACK: Good morning. For our 

constituency group of financial aid administrators at 

postsecondary institutions, we have our primary Mr. 

Daniel Barkowitz.
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MR. BARKOWITZ: Good morning and happy 

holidays, everyone.

MS. MACK: And we have our alternate, 

Ms. Alyssa Dobson.

MS. DOBSON: Good morning.

MS. MACK: Good morning. For our fouryear public institutions, we have Dr. Marjorie DorimeWilliams.

DR. DORIME-WILLIAMS: Good morning, 

everyone.

MS. MACK: Good morning, Marjorie, and 

her alternate Ms. Rachel Feldman will be joining us 

later today. For independent students we have as our 

primary Ms. Michaela Martin.

MS. MARTIN: Good morning. I'll be on 

camera shortly.

MS. MACK: Okay, thanks, Michaela, and 

we have our alternate Dr. Stanley Andrisse.

DR. ANDRISSE: Morning, everyone.

MS. MACK: Morning, Stan. For 

constituency group of individuals with disabilities or 

groups representing them, we have our primary Ms. 

Bethany Lilly. 

MS. LILLY: Good morning, everybody.

MS. MACK: Good morning. And we have 
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our alternate Mr. John Whitelaw.

MR. WHITELAW: Good morning.

MS. MACK: For our constituency group 

of legal assistance organizations that represent 

students and/or borrowers, we have our primary Ms. 

Persis Yu.

MS. YU: Good morning, all.

MS. MACK: Good morning, and our 

alternate, Mr. Joshua Rovenger.

MR. ROVENGER: Morning, everybody.

MS. MACK: Morning. For the 

constituency group of minority serving institutions, we 

have our alternate who has served as our primary 

throughout the sessions, Ms. Noelia Gonzalez.

MS. GONZALEZ: Good morning, everyone.

MS. MACK: Good morning. For the 

constituency group, private nonprofit institutions, we 

have our primary Ms. Misty Sabouneh.

MS. SABOUNEH: Good morning.

MS. MACK: Good morning. And we have 

our alternate, Dr. Terrence McTier, Jr.

DR. MCTIER: Good morning.

MS. MACK: Good morning. For 

constituency group of proprietary institutions, we have 

our primary, Ms. Jessica Barry.
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MS. BARRY: Good morning, everyone.

MS. MACK: Good morning, and our 

alternate Dr. Carol Colvin. Good morning, Carol. For 

states attorneys general, we have our primary, Mr. 

Joseph Sanders.

MR. SANDERS: Morning, all.

MS. MACK: Morning. And our alternate, 

Mr. Eric Apar.

MR. APAR: Morning, everyone.

MS. MACK: For state higher education 

executive officers, state authorizing agencies, and/or 

state regulators, we have our primary, Dr. David 

Tandberg.

DR. TANDBERG: Good morning, everyone.

MS. MACK: Good morning, David. And 

our alternate, Ms. Suzanne Martindale.

MS. MARTINDALE: Good morning.

MS. MACK: Good morning. For 

constituency group of student loan borrowers, we have 

our primary, Ms. Jaycee O'Pwoa (phonetic). Excuse me, 

Jeri O'Bryan-Losee. Sorry, Jeri.

MS. O'BRYAN-LOSEE: That's alright. 

I've been called worse. Good morning, everybody.

MS. MACK: Me too. But I won't share 

that. And our alternate Ms. Jennifer Cardenas, I 
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believe, is joining us a little bit later. For the 

constituency group of two-year public institutions, we 

have our primary Dr. Robert Ayala.

DR. AYALA: Good morning, ladies and 

gentlemen.

MS. MACK: Morning, and our alternate, 

Dr. Christina Tangalakis.

DR. TANGALAKIS: Good morning. 

MS. MACK: Good morning. For the 

constituency group of the United States service members, 

veterans or groups representing them, we have primary, 

Mr. Justin Hauschild.

MR. HAUSCHILD: Good morning, folks. 

MS. MACK: Good morning, Justin. And 

our alternate Ms. Emily DeVito.

MS. DEVITO: Good morning.

MS. MACK: Good morning. And for our 

State DOCs, we have Ms. Anne Precythe. 

MS. PRECYTHE: Good morning.

MS. MACK: Good morning, Anne. Thank 

you to the committee members, I believe we've done our 

full roll call. Now we move on to our two esteemed 

advisers. For PSLF, we have Ms. Heather Jarvis.

MS. JARVIS: Good morning.

MS. MACK: Good morning, Heather. And 
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for economic and/or higher education data, we have Dr. 

Raj Darolia.

DR. DAROLIA: Good morning.

MS. MACK: Good morning. Okay, to 

round out the introductions, I'll remind you of your 

FMCS team. My name is Kayla Mack. I'm joined by my 

esteemed colleagues, Ms. Cindy Jeffries. Good morning, 

Cindy.

MS. JEFFRIES: Good morning.

MS. MACK: Mr. Brady Roberts.

MR. ROBERTS: Hey, everyone. 

MS. MACK: And Mr. Kevin Hawkins.

MR. HAWKINS: Good morning, all.

MS. MACK: Thank you. Alright. Just a 

few reminders. If you have not already fixed your naming 

convention, it looks like most, if not all, of you have, 

please do so now. When you're not speaking, we ask that 

you remain on mute just so that we can minimize 

background noise and distractions. And at this table at 

this time, I would like to invite only those folks who 

are participating at the main table to remain on screen 

and on camera. We are going to have public comments 

today. Folks are signing up for today, tomorrow and 

Thursday. There will in fact be no public comment on 

Friday afternoon because at that time we will be 
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concluded. And lastly, we do want to thank everybody for 

their efforts yesterday and congratulate you all on your 

successes yesterday. To recap, the Committee was able to 

reach consensus on two issues. We did have productive 

dialog around two additional issues, and we're close to 

consensus, but we do have a single blocker on two of 

those issues, so we do hope to revisit those and to 

continue to work towards consensus on those issues as 

we're able and as appropriate. We're going to continue 

asking you all to work towards consensus today, which is 

the aim of good faith efforts in the negotiated 

rulemaking process. So keep in mind, when we get to 

those checks, they will be an official consensus checks 

and we'll make sure that everyone is clear on what we 

are taking consensus on at that time when we get there. 

Alright, we're going to pick up with IDR today. We had 

just started. Jennifer had walked us through the first 

two pages and we were opening up for comment. As we work 

through the IDR paper, we are going to chunk it out. So 

keep in mind, we would ask that your comments and 

questions be related to the two pages or how we continue 

to chunk that paper out. At the end of the discussion, 

though, we will be taking one consensus check on the 

entirety of that issue. Jennifer, is there anything that 

you would like to share around those first two pages to 
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get us started before I open it up to comment?

MS. HONG: I could just do a quick 

refresh. Basically, we're looking at the IDR document, 

and we're looking at definitions regarding beginning 

with discretionary income. There's just recall some of 

these definitions don't necessarily apply to the 

proposed new IDR plan. We've put everything under one 

section to kind of better streamline and organize the 

information. I just want to point you again to page two, 

we were talking about monthly payment or the equivalent. 

Again, I just want to emphasize we've included the 

default deferment and forbearances to count as monthly 

payments and those are enumerated later in the document. 

We've also created a process to address the forbearance 

steering. Again, that's later in the document, but it's 

referenced here under a monthly payment or the 

equivalent. And again, just to point out the bottom of 

page two, partial financial hardship was just some 

wordsmithing. Nothing has changed substantively in that 

section. So that's as far as we got. I know many of the 

comments are kind of about the proposal generally, but 

I'm happy to move on. But I see a hand raised, so I'll 

pause there.

MS. MACK: Okay, I just want to note 

that I believe Carol is in for proprietary institutions, 
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and it looks like Stan is in for independent students. I 

noted yesterday at the conclusion of our session, 

Persis, your hand was up and Marjorie your hand was up 

as well. So if you ladies want to begin the dialog 

today, raise your hand. Persis you already have. So I'm 

going to begin with you, please.

MS. YU: Thank you. And and since 

we're kicking off, I wanted to somewhat relate this 

conversation back to to a lot of the public testimony 

that we heard yesterday. We heard, you know, a lot of 

public service workers who expressed a lot of 

frustration about the fact that they weren't getting the 

benefits of the Public Service Loan Forgiveness program 

despite meeting the spirit of the program. And what I 

wanted to say as we start the Income Driven Repayment 

dialog is that if you really peel back and I think 

that's our job here, right? As as policymakers to peel 

back on the stories that the folks who are not getting 

the relief, but why are they not getting the relief and 

an underlying a lot of these problems were really Income 

Driven Repayment problems. They're manifested through 

the fact that they didn't qualify for public service 

loan forgiveness. But really, we're talking about IDR 

failures, right? We heard people talk about the fact 

that the the IDR payment was not affordable, which is 
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why they had to take forbearances. Or we heard about the 

fact that they were steered into these forbearance and 

they're not getting credit for these. These are IDR 

problems. And in order to fix the fundamental problems 

of PSLF, we really fundamentally need to fix the 

problems with Income Driven Repayment. We cannot do this 

piecemeal. They're all connected. But I think, and so 

first of all, just to say like our public service 

programs absolutely need to work for for public service 

workers. But we also need IDR to work for the folks who 

are not who are not able to show up for public 

testimony. You know, my clients are restaurant workers, 

my clients are grocery store workers, and they don't 

qualify for public service loan forgiveness. And they 

need IDR to work. They need an affordable program that's 

going to count the time that they've been in repayment 

to work for them. I think it's worth thinking about why, 

you know, why are people struggling so hard to get 

shoehorned into public service loan forgiveness? And 

it's because IDR does not work, and we need a program 

that is working for all borrowers, all borrowers, 

meaning borrowers with graduate loans, borrowers with 

parent plus loans, you know, borrowers who are in public 

service and borrowers who are not in public service 

because they need to send money to family members who 
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are not in their immediate family. So we need these 

programs to work. I I appreciate all of the public 

testimony, and I think we need to take that back to us 

with this discussion. I find I just as a technical note, 

I find the way that we're scrolling through the 

especially the IDR regs to be a little challenging 

because we have things, right, we're talking about how 

we count payments, but that's really talks later on.

MR. HAWKINS: Thirty seconds.

MS. YU: Marjorie dropped in the chat, 

and I'll let her speak since she's speaking up next. 

Speak more to this, but I thought she had an excellent 

proposal on how to discuss these topics in a way that 

was more comprehensive for each of the discrete topics 

when we're talking about the payment amount or we're 

talking about time to cancelation, I think that that 

makes a lot more sense. And I of course, will defer to 

her to speak more to that at that point. Thank you.

MS. MACK: Thanks, Persis. Marjorie 

why don't you walk us through that?

DR. DORIME-WILLIAMS: Sure. And so 

now, of course, I'm like, what did I do with the list? 

But I think to second Persis's point is that while we 

understand the goal is about the language in the text, 

we need to have a conversation about the issues that the 
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language and the text is addressing. And so I'll say 

specifically, and I want to call back to something that 

you said yesterday, Jennifer, about rights, education 

being a ticket to the middle class. And I think that we 

all agree. I think the folks who have called in to give 

public comment agree that the goal of an education is to 

look for social mobility is to advance individuals in 

terms of their careers, in terms of right family and 

lifetime outcomes. However, I'm really concerned about 

how we're looking at this in terms of equity and 

specifically because we received evidence and research 

and data about the disproportionate impact of student 

loans and affordability on borrowers of color. In 

addition to also getting information about the fact that 

black borrowers have to get advanced degrees to be on 

par with their white peers and colleagues. You also 

cannot go into specific fields and areas related to 

public service without those advanced degrees. Right. 

We've talked about social workers, for example, we've 

talked about counselors, we've talked about folks who 

work in nonprofits and do community work, and we've 

heard from those individuals as well. And so to me, it's 

really concerning that there's language in here that 

distinguishes between undergraduate and graduate 

degrees. When we received evidence and I would say, 
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thank you Raj, for sharing those documents, right? From 

scholars who study this. And so we can't say that we 

understand that education is a ticket to the middle 

class. We understand that education is something that 

helps individuals advance their own life outcomes for 

their families, for their communities, while at the same 

time denying those same individuals’ opportunities for 

forgiveness and opportunities to engage in a program 

that's less cumbersome. And so I really think it makes 

more sense for us to look at this holistically and to 

talk through the topics and then look back at the 

regulatory language instead of trying to do this right 

page by page. I think as we've done for some other 

issues where because we're talking about similar issues, 

I think that made a little bit more sense. So again, I 

want to bring that to the forefront. I think, yes, 

right, education is a ticket to the middle class. My 

parents are immigrants to this country. They're, all 

people understand that. I think we all know that. But if 

we're going to create language that excludes students or 

penalizes them, right, (inaudible) issues beyond their 

control, I really think that that's doing a disservice 

both to this committee and the work and time we've 

invested in these issues.

MS. MACK: Thank you, Marjorie. Jeri, 
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I see your hand, please.

MS. O'BRYAN-LOSEE: Marjorie rocks. 

That was that was exactly. I just want to add a couple 

more examples to her to what she was saying. When we 

talk about health care workers, when we talk about they 

need, they all need graduate degrees. We know there's a 

health care shortage right now and we're not going to be 

having people who work for for-profits in the PSLF 

program. We're cutting off our future nurses, doctors, 

all who need advanced degrees, plus the people who teach 

and train them. And I also want to put out the working 

poor. Most K through 12 teachers need to have advanced 

degrees. People running daycare centers have to have 

advanced degrees in many places. And I think that we do 

a disservice by not including them into the mix of what 

we're talking about. Thank you, Jeri. Daniel, please.

MR. BARKOWITZ: So, you know, I think 

one of the one of the concerns that you're hearing 

Jennifer and I would echo this is that I feel this 

proposal is a lot of tinkering around the edges, but not 

really a broad scale reform of income based, income 

driven or Income Based Repayment Plans. So I'll put a 

proposal on the table. I wonder, and I struggle with the 

idea that the time to forgiveness is as long as it is. 

We say to our public service colleagues, those who work 
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in public service, you have 10 years, you can earn 

income and work for 10 years, and we'll forgive your 

loans after 10 years of public service. That makes sense 

to me. I'm now a beneficiary of that thanks to what came 

through the the waiver, and I appreciate that 

dramatically. But I would also say, you know, I feel 

badly for my colleagues who who aren't working or who 

are struggling to be a livable wage that we're saying to 

them, you're 10 years aren't as valuable, your 10 years 

of living in that really should be twenty or twenty-five

or longer. And so I would I would argue that as a 

starting frame, we've set an expectation of 10 years. I 

would love. I would love to see 10 years of forgiveness 

or 10 years to forgiveness for those who have limited 

income because, you know, carrying that burden for 20 or 

25 years is more than life altering it’s trajectory 

altering. And so you know that that as an example, I 

think, would be a strong statement of equity that could 

alleviate this. I'm curious and I don't know if this 

data is available, but if the Department is looking at 

the amounts of income of those who are now getting 

forgiveness out of the new PSLF waiver, I would venture 

to say it's much higher than the group that would 

ultimately get forgiveness out of this Income Based 

Repayment Plan. And with that, I'll I'll put my hand 
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down. Thank you.

MS. MACK: Thank you, Daniel. David, 

please go ahead.

DR. TANDBERG: Thank you so much and 

just a huge plus one to everyone that's spoken before me 

and to, you know, asked the Department to look at that 

what Joe is put in the chat. I think he did a really 

good job of summarizing where the committee is on this, 

you know, and I profess my disappointment. You know, I 

think the Department's come back with some really great 

recommendations on so many topics. On this one, I think 

we had expected the Department to swing for the fences 

and instead you went for a single. And I think there's 

some really clear areas where we could greatly improve 

the proposed changes. And like I said, Joe summarized 

those. I'd like to pick up on something that Marjorie 

brought up in regards to black borrowers seeking 

graduate degrees. I think one of the primary roles for 

public policy is to address where the greatest 

inequalities and abuses exist, and there is significant 

evidence that many proprietary institutions in 

particular recognize the desperate desperation and 

desire of so many black Americans who are seeking a 

better life, knowing that they need a graduate degree 

and are then handed a ton of debt, inferior products and 
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almost no way to effectively pay it off. That abuse of 

desperation is just sickening to me. And the fact that 

we would not address that now when we have this 

opportunity, I think, is unconscionable. I think we have 

to add graduate debt to what we're doing here because 

the the the evidence, the facts, the stories, all are 

calling for us to do that and that and I wanted to 

highlight that. But I would speak just as passionately 

about each of the proposals that Joe put in the chat. 

All of them, I think if we don't do it now, it's like 

when? These are, these are clear wins for all of our 

constituencies.

MS. MACK: Thank you, David. Bethany, 

please go ahead.

MS. LILLY: I maybe should pause 

because I'm just going to jump in like Daniel did on one 

of the proposals in the chat, and I don't know if we 

want to go through the whole document before we jump 

into the different topics or I realized after I put my 

hand up, I should ask that question before I started 

talking.

MS. MACK: Sure. And that's what I was 

considering as well. I think we heard yesterday the idea 

or suggestion that we chunk this out, but I think what 

I'm hearing today is it may make sense to instead go 
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through the document comprehensively and then unpack 

some of the issues here. So Department, let me ask you 

Jennifer, are you comfortable walking through the 

entirety of this paper and then we circle back for 

comments and questions?

MS. HONG: Yes. I'm prepared to do 

that.

MS. MACK: Then let me turn it over to 

you to do that.

MS. HONG: Okay.

MS. MACK: Thanks for pausing, 

Bethany. 

MS. HONG: So thank you all for your 

comments thus far. I'll just go over the whole document. 

I do want to say at the outset that this issue of 

targeted benefits, we've always said at the outset that 

we're interested in the lower income, lower balanced 

borrowers that we wanted to focus on undergraduate 

students. I understand that's that's not to say that 

graduate borrowers are not important. We have other 

repayment plans to serve those borrowers. But in trying 

to address these targeted benefits, we wanted to, we 

feel like the marginal rate and I'll get into that, 

really gets to the issue of making more targeted 

benefits available to everybody. That way, we can 
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address the lower income borrowers, those working 

towards an undergraduate degree, those that are more 

likely to go into default, which is exactly the issue 

that we're trying to address through this proposed plan. 

So on page three, so left on page two, on page three in 

the middle of page three, if we could cue the document. 

Okay, one of the things that we are permitting here and 

we're making it explicit in the regulation is that we're 

allowing a borrower in default to use IBR because doing 

so allows them to also make progress toward forgiveness. 

And we can't do that in this new proposed plan under the 

ICR plan. So we've made that explicit in the reg that 

regardless of whether the borrower is in default on the 

loans selected for repayment under the plan, they will 

be able to make their payments count on IBR. So that's 

one point we discussed. Again, under D, we landed to 

focus on undergraduate loans. We've had so many 

presentations to kind of figure out which levers to 

pull. There's been, you know, direct questions of what 

the parameters are, what are we focusing on? How can we 

focus and target benefits while addressing kind of 

broader issues, the broader population and where we 

landed, what we needed to focus on undergraduate 

students. And we really need to address the first first 

entry, first entry level degree and with with with the 
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idea that the other payment plans can address graduate 

loan debt. Alright, going to page four, that whole 

section is highlighted just again because it was 

reworked. I understand Joe had suggested that we mirror 

(inaudible) borrowers to pay, we've put it along with 

REPAYE. And that's the combined income of the borrower 

spouses used in the calculation in all cases, regardless 

of whether the borrower spouse file a joint federal 

income tax return or a separate. So we've we're marrying 

that with REPAYE in the proposed language. And then 

again, for EICR, along with all the other IBR or IDR 

plans, spouses eligible loan debt is included for 

purposes of adjusting the borrower's monthly payment 

amount as described in paragraph G and then under 

romanette two, for ICR spousal loans are eligible for 

repayment under the ICR plan in accordance with 

paragraph D2 of this section. And that's on the ICR 

plan. Okay, there's just some minor changes on five, 

page five. And then let's go to let's go to section five 

at the bottom of the page because I know a lot of people 

had comments on this. So we are using an income 

exemption to equal to 200 percent of the federal poverty 

level, which is approximately 25,000 for single 

individual. Again, we've landed on a marginal rate. We 

feel like these targeted benefits can be made available 
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to everybody to calculate payments so you pay nothing 

from zero to 20 to 200 percent of the poverty level. 

Then when you get from 200 to 300 percent, five percent 

of the income share and then 10 percent of amounts over 

that. So in example provided, it is a marginal rate, 

someone earning 60,000 as a single individual, they 

would have the income the exemption for the 25,000, pay 

five percent on 13,600 and then 10 percent on 21,000, 

which would lower their total payment on the plan from 

230 to 232, whereas it would normally be 339 on most IDR 

plans. So I know that there was questions about making 

the income protection higher. We landed at 200, I think, 

from Raj's presentation, again, we saw that, you know, 

as income protection increases to higher levels, the 

benefits were largely accrued to higher income 

borrowers. So in order to address and target these 

benefits to the population that we want to while making 

them available to everybody, we feel like this marginal 

rate addresses a lot of the concerns. So that is how the 

monthly payments are calculated. Again, it brings out 

everybody paying less. Let's see. Yeah, I'll just leave 

that there, and then we'll. I think that's kind of like 

the centerpiece of a lot of the comments that came 

across yesterday and this morning, so we can revisit 

that and maybe Raj can talk about what this means. Give 
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us some examples in terms of the marginal rate. On page 

six, you'll see a lot of highlight there. The main issue 

is under interest subsidies on a $0 payment will due to 

due to their income have all unpaid interest forgiven. 

That is on the on the bottom of page six. So for $0 

dollar payments, we will pay the interest. In subsection 

four. Okay, page seven. I know again, we talked about. 

years to forgiveness. So what we're proposing where we 

landed on forgiveness under K, there you go Vanessa, is 

20 years. And so. We explored the 10 years that was 

proposed, I know we discussed a lot of that at the 

previous session. And this is where we landed, I don't 

know, I don't have much more to say about that, but it's 

20 years, 20 years to forgiveness. And just at this 

point in time, we're not comfortable with going back to 

the (inaudible) had a lot of concerns regarding the 20 

year forgiveness timeline. Separately, we did look into 

monthly cancelation for incremental and annual 

cancelation of loans. And (inaudible) can talk more 

about that, but we feel like we don't have the legal 

authority to do the cancelation. So that is the language 

that we have there. I can get, Michaela, did you want to 

comment there? Did you want me to keep going here?

MS. MARTIN: Yeah. You mentioned that 

like, you know, 20 years is where you landed there, like 
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a lot of conversation, I was just wondering if you were 

willing or able to provide like why that was 20. Like 

just why really?

MS. MACK: Jen, I don't know if you 

have an immediate response to that, and I know that more 

hands are going to come up. I would like to ask that we 

allow Jennifer to just walk through the rest of the 

document and then I invite any and all hands for for 

comments and questions.

MS. HONG: Thanks, Kayla. I mean, I'm 

close to being done here. There was a question. Okay, 

so. That is, so 20 years to forgiveness for ICR. page 

eight. So we've added we've added some additional 

deferments and we have forbearance and we have mandatory 

and an administrative forbearance that that was actually 

in there before we've added a cross reference to pick up 

periods of national emergency, as well as issues like 

when a loan is transferred. So again, we've added we 

have training program deferment, unemployment deferment. 

And post active-duty student deferment, so all these 

count toward monthly payments. So I mean, I realize. I'm 

hearing your comments, and I just I don't want to, I 

don't want you to dismiss this, I mean, it's it's it's 

lower payments every month and it is and it is an 

attempt to try and both target the borrowers that we 
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Negotiated Rulemaking - 12/07/21

want to target. We said from the outset what we were 

interested in. We're interested in those lower balance, 

lower income, undergrad, working toward an undergraduate 

to keep them from going into default to help them ensure 

completion of their degree while addressing the higher 

balance borrowers as well. I think that the marginal 

rate does that, and we've included additional deferments 

to count as monthly payments. In addition to that, we 

have addressed the forbearance steering issue explicitly 

in the regulation. Okay, so the next the next comment in 

the middle of page under subsection five, romanette 

five. The language about if a borrower consolidates one 

or more direct or FFEL loan into a direct consolidation 

loan, the payments the borrower made on the direct or 

FFEL loans prior to consolidating, and that met the 

criteria in paragraph four of the section 682209 866 or 

682215 will count as qualifying payments on the direct 

consolidation loan. Okay, so what did what does that 

mean? That means the language allows payments made on 

IDR to not reset if a borrower consolidates direct 

loans. Similarly, borrower payments on FFEL that are on 

the standard payment plan on IBR can keep counting if 

the borrower consolidates onto DL. That's a big issue 

that is a real big issue for borrowers so that we're not 

resetting the clock on consolidation. All those previous 
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Negotiated Rulemaking - 12/07/21

payments, they'll count toward forgiveness. Okay. Again, 

we can't we can't count defaulted borrowers and we can't 

put them on ICR, so we want to make sure that they count 

the payments made on IBR while in default toward 

forgiveness. Department (inaudible) that we can't do it 

on ICR and we want to we're proposing to make borrowers 

in default eligible only for IBR to ensure that their 

zero dollar payments count toward forgiveness. Again, 

for the IBR plan, a payment (inaudible) I through three 

I on a loan in default is also considered to satisfy 

monthly repayment obligation for the purposes of 

forgiveness under paragraph K. Another big change, 

right? Inclusion of defaulted borrowers and IBR and 

counting those zero-dollar payments toward forgiveness. 

I think that's I think that's significant. Again, 

another significant change. We have inserted a hold 

harmless process that would allow any borrower who has 

spent time in a deferment or forbearance to make up for 

those months by making the payment they would have 

otherwise made. This includes a zero-dollar payment if 

the borrower would have been eligible for it. So again, 

this doesn't we're not going to go and explore what 

happened. Did you know, does a borrower need to prove 

that they have been steered? No, we're just going to do 

it. We're going to make this and put it in regulation. 
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Negotiated Rulemaking - 12/07/21

So we always have the authority. We've said this before. 

We've always had the authority to make the correction. I 

realize and that's kind of limited to borrowers that 

have the wherewithal to call and, you know, have to deal 

with this issue about forbearance steering, well, now 

it's in regulation. And now we will count that. We're 

saying assertively that we will count those payments 

that you've been on forbearance. We'll count them toward 

forgiveness. If you're if you’re a defaulted borrower, 

you have zero-dollar payment we'll count those payments. 

So I think I just don't want I don't want these big wins 

to be dismissed by you. I understand we all want we want 

the grand plan to address all borrowers. But you know, 

there is some prioritizing that we have to do. And if we

can lower the payments for the most needy borrowers and 

we can carry that benefit through higher higher income, 

higher balance borrowers. I feel like we we can achieve 

that through the marginal rate that we're proposing for 

zero to five, 10 percent of the income share. I see a 

lot of hands. I'm going to keep talking. Two more pages, 

guys. Everything else here you see on page nine. Okay. 

(Inaudible) technical revisions and then at the very end 

bottom of page 10 automatic enrollment in an IDR plan, 

okay, we talked about this a lot. So we're proposing 

that someone who goes 80 days late be put on to IDR plan 
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Negotiated Rulemaking - 12/07/21

if if it can get the necessary data to calculate a 

payment. So again, this is to avoid negative credit 

reporting. So and we're proposing something similar for 

borrowers and defaults as long as so long as we can 

obtain their consent. Okay, and that's under M at the 

very end automatic enrollment in an IDR plan. And again, 

another another issue that we were we had talked 

extensively about. To keep these borrowers out of 

default and to ensure that their zero-dollar payments 

count toward monthly forgiveness. So just to summarize 

the high points here. We've got putting the borrowers, 

defaulted borrowers on IBR, counting those zero-dollar

payments toward forgiveness. The ICR is going to address 

undergraduate loans. We want to we want to have a plan 

exclusively exclusively for undergraduates. So that is 

what this proposed plan is seeking to address. We're 

mirroring the treatment of married borrowers to that of 

REPAYE marginal rate two hundred beginning with 200 

percent of income income exemption. And then again, five 

percent from two zero to two. Two hundred and three 

hundred percent of the poverty level. And then 10 

percent for any amounts above that. And then paying all 

forgiving all interest on zero-dollar payments, 20 years 

to forgiveness and the inclusion of additional 

deferments and forbearances. To include national 
30

Negotiated Rulemaking - 12/07/21

emergencies also counting payments again for defaulted 

borrowers, hold harmless procedures for forbearance 

steering, count those payments toward forgiveness as 

well. And then finally, automatic enrollment in IDR, in 

summary. I see a lot of hands.

MS. MACK: Thank you for walking us 

through that, Jennifer. I, too, see a lot of hands, and 

it looks like in the chat, everyone sort of organizing 

the thoughts. I'm going to invite questions, comments, 

concerns and ideas. I just want to keep us focusing on 

working towards consensus. So let's keep that in mind in 

terms of what that might take. David, I want to invite 

you to kick us off.

DR. TANDBERG: Yeah, thank you so 

much, Jennifer. I appreciate your presentation and the 

work of the Department. I would say in baseball, a 

single is certainly something to celebrate. And I think 

this is a definitely what's been proposed is an 

improvement over what existed, no doubt. I guess my the 

big broad question I'm left with is you've said you felt 

the need to prioritize and to focus, and I don't 

understand why when we could do more. So what was what's 

the underlying motivation to restrict it and to 

prioritize? I and this is a sincere question. I don't 

understand that. What's the risk that I don't see that 
31

Negotiated Rulemaking - 12/07/21

that you all see?

MS. HONG: I think I think that's a I 

think that really gets to the heart of it. So what we've 

what we've seen through IBR is that the beneficiaries of 

the IBR are higher income, higher balanced borrowers. So 

we're losing out on the neediest borrowers and keeping 

them out of default. That's that's we want to shine a 

light and we want to serve those students. That's the 

issue. We want to keep them out of default and we want 

to ensure that borrowers that are working toward an 

undergraduate degree have the support that they need and 

that they'll finish and stay out of and stay out of 

default.

DR. TANDBERG: I agree with-. 

MS. HONG: The high balance borrowers 

really well. The higher income, higher balance borrowers 

seem to be the biggest beneficiaries of these plans. And 

that's important. I'm not. I mean, as Marjorie has 

enumerated, you know, more and more, the graduate degree 

is important to entering a profession and we understand 

all that and we're not. And that's why we chose a 

marginal rate because we feel like it provides targeted 

benefits while providing some relief on the payment end 

for everybody, for all borrowers. But in terms of having 

to kind of shine a light and focus. We want to keep 
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Negotiated Rulemaking - 12/07/21

borrowers out of delinquency and we want them to finish 

their undergraduate degree. That doesn't negate 

everything else that everybody has said here. It's all, 

it's all important.

MS. MACK: Thank you, David, thank 

you, Jennifer. Michaela, please.

MS. MARTIN: I first want to speak on 

the the the point of how this is like helping students 

complete their degree because students who don't 

typically make payments while they're students, and so I 

don't think that this affects the likelihood of of 

attaining their degree because it's usually paused 

during that time. I think that bringing the payments 

down is really, really awesome. But 20 years is still 

too long, particularly when we're talking about a lot of 

students who maybe haven't actually completed their 

degree. I've been trying to get my friend Sam to come to 

public comment. I've had her testify in other spaces 

that I've been in. We haven't been able to do that. So 

I'm just going to share a story with your permission. 

Sam's husband was deployed and has served multiple tours 

overseas, and since he's been out of the military and 

come home, they have had just a string of issues, 

including having to get him signed up to be on receive 

disability benefits under the VA, which is a whole 
33

Negotiated Rulemaking - 12/07/21

process. During this time, she was also in school, so 

when he came back, she became the full, full time, 

essentially still single mother now of two, right? 

Because because he needed care and was the only income 

provider and had to stop out of school. So now she owes 

over $50,000 in debt. (Inaudible) and under this plan, 

we mapped it all out and she'd owe about forty-six

dollars a month, which is great, that's totally 

affordable. But for 20 years. Like now, she's working 

three jobs and she's doing awesome. She's like hustling 

insurance and she's working like as a receptionist and 

like she's doing. I mean, like, I'm really proud of her, 

but she can't get a car like she can't get (inaudible) 

right now, like she's still not making enough to be able 

to like, their income now is like technically within a 

rate in which they could afford a mortgage, which would 

be cheaper than the apartment they're renting. They 

won't qualify because they have all this debt attached 

to them. So like, I think that that 20 years of like 

just not being able to imagine yourself living a life in 

which you get to participate and are like, you know, our 

society. And then also on the other end, I want to 

acknowledge that like for folks who have been in default 

for like a long time, Sam's been in default actually now 

for like two years. We're working on it, trying to get 
34

Negotiated Rulemaking - 12/07/21

her out of that. But that other lending institutions 

would drop a loan that hasn't been paid on for years 

because it's just not. At some point, it becomes that it 

costs more money to service that loan and to have people 

trying to collect that debt, then it would be then to 

just not do it, you know, like $50 a year for 20 years, 

like for what? For what?

MS. MACK: Thank you, Michaela. 

Daniel, please go ahead.

MR. BARKOWITZ: Thank you. I've got 

three items and I'll try to do them within the three 

minutes, but if I go long, I'll take my place at the end 

of the line. So two of them are substantive, one is 

technical and I want to I want to just acknowledge 

again, I'm tinkering on the edges because that's where 

we are. I'd prefer not to be, but I want to give 

feedback to what's out there. So first of all, I want to 

comment on the the calculation of the monthly payment. I 

appreciate the marginal rate, but I would urge the 

Department to use as a baseline the same eligibility 

criteria you're using for Pell Grants in the new SAI 

calculation. In the new SAI calculation, Pell can 

minimum Pell can be offered to someone with 400 percent 

of annual income. So I would suggest that we mirror that 

and go instead of 200 300 to 250 400. I think that would 
35

Negotiated Rulemaking - 12/07/21

go a long way toward alleviating some of my concern 

about affordability. Again, it's not saying anyone with 

400 percent pays nothing, but it would again help with 

the marginal assessment so that it would be five percent 

of the 250 to 400 range and 10 percent for 100 and 

above. I strongly urge the Department to match what's on 

the Pell calculation table. I think it just helps 

explain it better and gives it some face validity. On 

the next page, I have significant concerns about, let me 

back up. I appreciate strongly for getting interest for 

zero payment, but I have significant concerns about not 

forgiving interest when the payment is less than the 

interest. So if I pay a dollar, then my balance 

continues to grow. If my calculation of my payment is 

twenty dollars and my interest is sixty dollars, you 

know, it's a very, very high cliff. So my strong 

suggestion would be to say that interest that is 

assessed but unpaid due to the minimum calculation under 

this program would not would would be canceled using 

your language so that that expands so that we're not in 

a situation where we have an accumulating balance for 

those low balance individuals. And then finally, if I 

have time, Kevin, I know you're a stern timekeeper. I 

appreciate it. My technical correction on page eight is, 

I believe you're missing a letter or you skipped a 
36

Negotiated Rulemaking - 12/07/21

letter. So under your types of deferment and 

forbearance, you go from G to I, so I'm not sure if H 

was removed or if it's missed, but it just seems like 

there's a technical problem in the lettering. Oh my 

gosh, I did it. Okay, so there you go. That was my three 

minutes. Thank you.

MS. MACK: Thank you, Daniel. Persis, 

please go ahead.

MS. YU: Thank you, and I think I 

wanted to start with a discussion of just the goals as 

they were laid out by by Jennifer, I think there's, you 

know, preventing default is certainly a laudable goal 

that I can get behind. It just seems pretty arbitrary 

how and when the Department has decided to apply that 

goal. For example, Parent Plus borrowers in my 

experience and then the people that I've served are are 

are struggling and they have very limited options for 

Income Driven Repayment and the programs are not serving 

them well. The point that was made before that, you 

know, graduate borrowers or, you know, can use the other 

IDR programs. Well, frankly, Parent Plus borrowers 

cannot. And you know, we know that this is a huge racial 

justice issue. And why are we not providing a plan that 

Parent Plus borrowers will have a pathway to use and get 

affordable payments? I think we also know, though, that, 
37

Negotiated Rulemaking - 12/07/21

you know, black borrowers in particular have high 

default rates, and we also know that there is 

disparities that graduate borrowers are 

disproportionately black. So this again doesn't make 

sense. The goals are not aligned with the the the ways 

that you structured it. I very much appreciate I will go 

into some of the positives and then we'll jump in line 

for some more negatives. I appreciate the inclusion of 

IBR for defaulted borrowers and ensuring that the time 

that borrowers make payments on IDR on IBR count towards 

cancelation. I do think that that is a huge improvement 

and I encourage you and I can submit language to this 

effect that we also in terms of what we count towards 

forgiveness, include payments made while in defaults, 

whether they are voluntary/involuntary payments expand 

the idea this hold harmless to these payments as well. 

But I do want to point out that this doesn't solve 

default, right, it does not. Under these current regs, 

stop wage garnishment from occurring. It does not stop 

tax offsets with the EITC and the child tax credit 

protected, you know, so those will continue to occur. 

Folks will continue to have their Social Security 

benefits. There is more work that needs to be done for 

defaulted borrowers. They also will not have their Title 

Four funds restored, eligibility restored. So like there 
38

Negotiated Rulemaking - 12/07/21

is more work that needs to be done for married 

borrowers. Again, I appreciate in the positives. I think 

counting the savings towards cancelation for payments 

made in FFEL is a huge improvement and will greatly 

improve the situation and in fact is required by the 

statute. So I think that this alignment with the Income

Based Repayment (inaudible) is as helpful, and so I will 

jump back in line. Thank you.

MS. MACK: Thank you, Persis. Joe, you 

have the floor.

MR. SANDERS: Thanks, everybody. I'm 

going to I'm just going to address a single issue, I've 

been putting a bunch of other stuff in the chat, so I'll 

confine myself to one issue. I hear the Department on 

their priority of helping low income, low balance 

borrowers. I agree with David that we should really be 

thinking bigger, but I'm willing to in the good faith 

negotiation, meet the Department they are. I'm going to 

talk about forbearance steering and how to address that. 

I appreciate the Department's inclusion of the hold 

harmless provision, and I appreciate the effort to try 

to address this problem. So thank you for the for the 

time and effort that went into coming up with that 

proposal. I think that it falls short of helping the 

borrowers that you're prioritizing, low income, low 
39

Negotiated Rulemaking - 12/07/21

balance borrowers, because the administration of that 

hold harmless concept would seem to be something that's 

difficult to to navigate. So I deal with a lot of these 

borrowers, state attorneys generals deal with a lot of 

these borrowers. They're the type of people that will 

file a complaint and just say in general, like, help, I 

can't make my payment right. They don't know whether 

their loans are private or federal. They don't know what 

repayment plan they're in. They don't know. That, you 

know, they don't know who their servicer is. There's a 

real lack of information there, and so if you have a

program where they have to go back in time and demand 

information to help figure out what they would have made 

at some past previous time, it seems like a lot of those 

borrowers are going to fall out of that system the way 

they've been falling out of the current system. The 

Department expressed to me and others concerns about 

moral hazard with counting forbearances that everyone 

will just go into forbearance and then get their loans 

forgiven. And I'm skeptical that that would happen. But 

I but I hear the Department's concern. And so I've put 

forward a proposal which I sent over the weekend that 

would avoid those concerns that would target low income, 

low balance borrowers by looking at a period of 

consecutive forbearances. So if someone in the past has 
40

Negotiated Rulemaking - 12/07/21

been in forbearance for more than 24 months, that's 

somebody who should be in IDR. They have a structural 

problem making the payments. And if we only count those 

forbearance retroactively, there are no moral hazard 

concerns. So I appreciate the Department's prospective 

look. I think it can help, but I think we can do more, 

and I think that my proposal targets exactly the 

borrowers that the Department wants to. Thank you.

MS. MACK: Thank you, Joe. I do want 

to acknowledge that Suzanne Martindale has come to the 

table for state higher education executive officers. 

Dixie, I'd like to give you the floor.

MS. SAMANIEGO: So first off, my 

chickens and roosters, they're making noise. I feel very 

bad, I'm sorry, but really just wanted to, plus a 

thousand bajillion like points to what everyone was 

saying previously. Really wanted to go in hard on asking 

why there wasn't an inclusion of like a regional poverty 

guideline. I know previously I've asked about it and 

kind of what the answer was. There's just no capacity 

and it just kind of seems like that's always the answer. 

But and it would for me in my thought process and my own 

lived experiences, I think that if the Department truly 

wants to target low-income students right or low income 

borrowers, I think that it's important to find some way 
41

Negotiated Rulemaking - 12/07/21

to include understanding at the very least of regional 

poverty guidelines, mainly because we a lot of us, I 

think, are on like either coast of the country and we 

see it every day, right? Like well, 60K and 60,000 a 

year in one area is not the same as 60,000 another. And 

it's but also like we see that folks of color also just 

like struggle, period trying to make payments, right, 

and so for me, I think one of the ways that the 

Department could I guess just actually target students 

who are poor, including understanding of regional 

poverty guidelines, and I know the answer is probably 

going to be like, well, we don't have capacity. It's 

just I just want to know if there's any chance or 

possibility that the Department is going to include that 

because for me, that's something that's important to me. 

Obviously, I'm not going to. Not like I'm not going to 

hold consensus on this, but I would want know at least 

some understanding of it because as I see it just 

previously like the answer that I've gotten, it's just 

not sufficient. And personally, as a student of color, I 

don't think that's okay for the Department to just say, 

well, we don't have capacity instead of actually finding 

a way to increase capacity of bandwidth of the 

Department to include regional poverty guidelines. So 

I'll give Jennifer some time to figure out an answer or 
42

Negotiated Rulemaking - 12/07/21

if there is an answer. But yeah, I just wanted to put 

that in.

MS. MACK: Thank you, Dixie. I do want 

to acknowledge that Christina has come to the table for 

two-year public institutions. Bethany, I'll turn it over 

to you.

MS. LILLY: So I want to touch on two 

of the things that have already come up, but since we're 

talking about the big bucket issues, the first is the 

length of time to forgiveness. And I mean, I think that 

the The Jim Crow debt report made it very clear how 

hopeless borrowers of color feel about how long it takes 

to repay this debt. And I think that that's something 

that the Department, if they are trying to target lowincome borrowers need to think about. And I really think 

that, you know, people spend 40 to 50 years of their 

life working right, and we're asking them to spend half 

of that repaying debt that they needed to get into the 

career that they're in or to the excellent example 

Michaela put forward, didn't even get a degree out of 

it. And I think that those are the borrowers I'm 

thinking about. These payments are going to be, you 

know, very concentrated during periods of life where 

people are trying to buy houses, they're trying to raise 

kids where they have a lot of additional costs. And I 
43

Negotiated Rulemaking - 12/07/21

think it's completely unrealistic to keep that number at 

at 20 years like that. We're asking for a huge 

percentage of people's time here. And a big part of why 

I think people feel hopeless is the bigger picture 

concerns that everyone has been raising about how 

complicated the system is. It feels like you're in the 

middle of a scam and because it just doesn't make sense 

how it all works. And I haven't gone through the Public 

Service Loan Forgiveness piece as a very high-income

borrower. Like, yeah, it feels like a bit like a scam 

because it's so confusing. And I can only imagine for 

somebody who doesn't have the resources I do, it feels 

even more that way. So I really want to urge the 

Department to take another look at that to think about 

going to 15 years or 10 years. I think Daniel's 

arguments around 10 years were very persuasive to me. I 

also want to touch on the income disregard piece, you 

know the minimum there because, okay, so we're setting 

it at two hundred and three hundred percent right now, 

the rent for an average basic one one-bedroom apartment 

in the United States and to Dixie's points about 

geographic diversity, this is very different where I 

live. This is very different where she lives is just 

over a thousand dollars a month. The average income for 

somebody at 200 percent of federal poverty is going to 
44

Negotiated Rulemaking - 12/07/21

be. That's going to be 50 percent of their monthly 

income spent just on rent. And we are asking them to say 

then make payments on their student loans on top of

that? Like HUD doesn't even recommend you spend that 

much money on rent. HUD says you should be spending at a 

maximum 30 percent of your income on that, and we're 

asking people making spending 50 percent of their income 

to pay student loans. I think that's to be honest, quite 

ridiculous. I would really encourage the Department to 

look at going higher than that. If you get up to three 

hundred percent of federal poverty, that is a closer to 

the 30 percent mark that HUD suggests. I think that's a 

much more reasonable number. And so I just I want to 

flag like this means a lot to a lot of people, and we 

really need to be thinking about that. And if there's a 

way to do it geographically, as Dixie said, strong 

support for that as well because it is very different 

for people in D.C. and people in L.A. than it is for 

some. Thank you.

MS. MACK: Thank you, Bethany. Jeri, 

please go ahead.

MS. O'BRYAN-LOSEE: Thank you. I'll 

I'll also say that I appreciate the changes that have 

happened. My focus is going to be on the grad loan 

situation. And just to bounce off what several people 
45

Negotiated Rulemaking - 12/07/21

have said to simplify the process, just make it 

available to everybody. It's simple if you don't want 

them to be the same 20 years of forgiveness, 15 years, 

12 years, whatever. Great. But just be inclusive and 

include everyone. One of the things that I worry about 

and I'm not going to articulate this as well as I would 

as as others would, is that when people are finishing 

their undergrad, working on their undergrad and want to 

do more, it's they they miss out on the grad work 

because at the undergrad you tend to get state aid, you 

tend to get federal aid, you tend to get all these other 

things that help you through your undergraduate degree 

that you don't see at the graduate level. So people are 

taking an increase in funding at the graduate level. And 

I know there's I hear it in the comments being concerned 

about high borrowers and high with high loans getting 

forgiven. I'm not concerned about them. I'm concerned 

about the people in the middle. I'm concerned about the 

people who did have clear enough credit to get their 

Parent Plus loan for their child. But then after that, 

they're still paying on this loan that couldn't be 

turned back to the child. They're it's just because 

people have the credit to be able to qualify for a 

Parent Plus loan doesn't mean that that continues on. 

And I think we've heard that in the public comment and 
46

Negotiated Rulemaking - 12/07/21

the the other point, I forgot the train has left the 

station, I'm sorry, I'm going to let more articulate 

people, Marjorie's next. I know she's got this, but just 

since I'm not out of time yet, just again, 

simplification is going to be easiest. You know, not 

everybody on this call has to sell. I don't have to 

necessarily sell it to somebody finishing an associate's 

degree, but I have to be able to explain the program why 

they're excluded from a program at a graduate degree. 

You know, and I'll go back to my last point, and that's 

about the health care workers we've heard from people 

who are in for-profit health care industries that are 

the working poor. We've heard from nursing students, 

we've heard from people who are working with people with 

autism. We've heard about those things, the social 

workers that still require a graduate degree to do their 

work, but their loans are eating that up, and a good IDR 

program can help eliminate that.

MS. MACK: Thank you, Jeri. Marjorie, 

please go ahead.

DR. DORIME-WILLIAMS: Yeah, so Jeri 

actually took many of the words right from my mouth. I 

my specific question and I hope there is a answer, is 

why this policy can't be inclusive rather than 

exclusive. And so if we simply strike undergraduate and 
47

Negotiated Rulemaking - 12/07/21

keep it to student loans. I don't see how we're not 

still serving undergraduate borrowers while at the same 

time, not excluding other borrowers. In addition, while 

we're seeing national trends of decreased funding for 

particularly public institutions of higher education, 

much of that burden gets pushed onto graduate students. 

So at my own institution, we've got tuition waivers, 

we've got assistantship. And so again, these same 

students who are undergraduates who are low income from 

marginalized populations go on to get graduate. These 

are the same students. We're not talking about different 

folks. There are students who are low income, low income 

backgrounds who go to undergraduate to get undergraduate 

degrees and then continue on to get graduate degrees. 

And so I just it's really not clear to me why we can't 

simply remove that language because it doesn't mean that 

we're not still attending to the needs of undergraduate 

borrowers. I really, I know I'm going to keep harping on 

this. I know it's just one point, and I do, I think, 

also agree with everyone else. There is a lot here that 

is helpful in thinking about forbearances, deferments, 

automation and those are appreciated. But I really think 

that exclusionary policies aren't helpful, and then to 

try and undo it later, I feel like causes more 

difficulty both for the Department, right? And then 
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there's going to be another committee that's going to 

have to have this conversation again. And so I really, 

really strongly am stressing, can we please just strike 

that language and make this an inclusive policy? I don't 

see the harm that that does to undergraduate borrowers 

while also benefit graduate borrowers. The second thing 

is when we started this process as well was this goal of 

here's a better plan that's more simple and easy to 

understand. If now I'm a borrower who I have 

undergraduate loans and graduate loans, now I have to 

figure out two completely different plans in a system 

that we already know is beyond confusing and inefficient 

for borrowers, period. So I think this distinction works 

against the stated purposes of the Department to 

simplify, it is not inclusive and doesn't address these 

issues of equity that affect all borrowers.

MS. MACK: Thank you, Marjorie. 

Daniel, please go ahead.

MR. BARKOWITZ: Marjorie, I'm just 

gonna let you drop the mic on that for a second because, 

yeah, so I'm I'm going to echo and actually add, I 

wasn't going to comment on this, but I think the point 

that Marjorie raises about undergrad versus grad. If you 

think through the normal progression of a student, you 

finished your undergrad degree. Not everyone goes off 
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Negotiated Rulemaking - 12/07/21

immediately to grad school, so that student may 

consolidate their undergraduate loans and then they take 

out graduate loans. What do they do? And in a sense, is 

the calculation of the minimum monthly payment double 

because in a sense, they'd be under two different 

payment plans. So again, I think there are multiple 

issues of complexity here that I hadn't even thought 

about, Marjorie, until you just said that that I think 

are really important to address. So is the expectation 

an undergraduate borrower would then consolidate into a 

different repayment plan with their grad loans. It just 

counseling wise, it becomes extremely complicated. The 

point I was going to raise and my eyes are on my 

timekeeper, but the point I was going to raise is the 

married student issue. And again, I just want to talk 

for a moment about the public comment that was made 

yesterday by Professor Hayes from Marymount. I think 

that was really important to understand. So if we are, 

if the Department is thinking about and I think you have 

to think about Income Based Repayment Plans is a feeder 

to PSLF because they are connected. You won't get PSLF 

unless you're on an income-based plan. The the 

difficulty of a married borrower where one spouse is 

working under public service and the other is not, it 

becomes very limiting as a factor. And so, you know, 
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requiring in each of these plans or even EICR to require 

that that students in effect or borrowers in fact merge 

their income and merge their loans is a disincentive and 

a disaggregator for PSLF eligibility. So that's another 

piece that I would think maybe we want to reconsider is 

the idea of of having the married borrower’s information 

considered in her case, and I did some follow up with 

her yesterday. You know, she's got a very small loan 

amount that could be forgiven based on her years of 

experience. But again, under the wrong repayment plan, 

there's no way to go back and recalculate at that point 

and that, you know, that's a real loss in terms of the 

benefit to public service employees. Thank you.

MS. MACK: Thank you, Daniel. Persis, 

please go ahead.

MS. YU: Thank you, and I would like 

to just go back to the idea of bucketing these somewhat 

in the idea of if we're going to try to come to 

consensus on any particular issues, it might be easier 

if we're talking about one issue at a time. But but 

about that, I will go dive into the time to forgiveness 

proposal. One of the stated goals of the Department 

early on was that they wanted low-income borrowers to be 

able to get cancelation sooner. And so that is something 

that we again don't see in this, that the lowest income 
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borrowers, zero-dollar borrowers or the, you know, 10, 

15, $50, as Michaela pointed out, borrowers are still 

going to have to do it for 20 years. And that seems 

untenable. One of the proposals that I made that has not 

been addressed by the Department of Education is whether 

or not we can tier the amount or scale the amount of 

forgiveness by the borrower's income, and I think one 

can do this on an annual basis. I submitted a proposal. 

I I've talked to some colleagues who have done some more 

mapping and modeling and can provide a little bit more 

specific proposal on how one could tier cancelation by 

income so that borrowers who have, let's say, a, you 

know, make less than 150 percent of the federal poverty 

can get cancelation within five years. And then 

borrower, you know, and then we can scale it up to 15 or 

20 years for the highest income borrowers. But looking 

at this idea of how can we peg the amount of cancelation 

to what the borrower's income is, I think that would be 

a much more equitable way to target relief rather than 

this graduate versus undergraduate distinction or plus 

versus not plus. I think that there are ways that we can 

do this that can be responsive to the goals of helping 

low-income borrowers while also helping to get them out 

of debt. Because, as we know, only 32 borrowers have 

received cancelation under Income Driven Repayment. It's 
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not working. Folks aren't seeing cancelation. And if we 

take this plan to another 20 years, we're not going to 

know for another two decades whether or not it worked or 

not. And at that point, it's going to be too late and 

we've going to lock a lot of borrowers into a lifetime 

of debt. So I'd like to I'd like to hear some response 

in terms of the idea of having some kind of scale with 

cancelation and thinking about that as a way that we 

could target relief instead of picking and choosing 

which borrowers we are going to to help with this 

proposal.

MS. MACK: Thank you, Persis. I also 

want to note have been a number of great questions in 

the chat as well. I just saw one around statutory 

authority. I want to encourage you if the dialog isn't 

touching upon your question, to feel free to raise your 

hand and ask it to the group just to make sure that 

we're getting attention and to each of those questions 

for the purposes of our dialog as well. Suzanne, please 

go ahead.

MS. MARTINDALE: Great, thank you, so 

I will endeavor to make points that have not already 

been explicitly made. So, yeah, you know, when I when I 

hear, when I hear targeting, I hear complexity and a 

theoretical concern over the federal fisc, as opposed to 
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a concern for student borrowers’ success here. And I 

don't think as to Persis's point that anyone's got good 

enough math upon which to to say this is definitely 

going to work when it's a highly complex program and 

we're adding to an already complex ecosystem for student 

loan repayment. Also, I would be remiss as the state 

financial regulator if I did not mention that I think 

any program that you put down on paper, let's remember 

it's going to be implemented and operationalized by 

servicers, and we already know all the problems that 

have already existed with, you know, borrower calling a 

servicer. And maybe they get what a customer service rep 

for seven minutes. How are they going to explain this 

program, the eligibility, what your payments are going 

to be? I have great concerns about about how this could 

be operationalized and the ways in which it could go 

wrong. And also, I want to lift up again another point 

that Michaela made and to say, you know, in the in the 

private credit context, you know, if someone has a zerodollar payment for that long and then you charge it off, 

right? I think that there are hidden backend costs that 

we're not talking about in terms of servicing and 

collections of loans that simply cannot be repaid. And 

so again, I do think that all of these different aspects 

of this, the the the hesitancy to raise the amount of 
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protected income, the insistence on repayment for 20 

years and also, you know, some limitations on interest 

capitalization. I think you could go further there to 

cabin the front-end costs and then the back-end costs to 

the Department. But I do think that we'd be in a much 

better place if we had a simpler program where borrowers 

can understand their options and are more likely to 

engage in the programs and maybe find a modicum of trust 

in the system. I think that the increased complexity 

does does kind of tamper the interest in trying this at 

all. And then we're not really effectuating the stated 

goals here of trying to provide access. I will also say 

very briefly, you know, when we when we negotiated 

REPAYE, you know, there there was contention around how 

to how to determine the repayment periods and initially 

the Department considered, you know, seconds 20 years 

for most people. And then if they borrowed a dollar more 

above fifty-seven thousand five hundred, we were going 

to make them pay for twenty-five years and the 

Department backed off of that. If they backed away from 

the notion that we should penalize people with higher 

balances and that would just call out that, I don't 

think that we should do that here either. Thank you.

MS. MACK: Thank you, Suzanne. 

Michaela, please go ahead.
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MS. MARTIN: Yeah, first, I really 

want to like acknowledge that all of us in this space 

have a lot of privilege by even being in this space and 

that like, well, I'm not receiving any form of 

compensation. There are a lot of folks that like through 

their work and things, do have access to this space 

because of that, right? And on that that like when we're 

making when we're talking about making an IDR plan that 

works for PSLF and we're talking about how many people 

were (inaudible) PSLF, there's a reason for that, right? 

Folks who have access to even think about PSLF 

inherently also have privilege, right? They have a job. 

They likely already have a degree and they're doing work 

that people think of as worthy of forgiveness, right? 

Which in itself so like just because we're not seeing 

folks in the comments coming out and saying, hey, I 

didn't, I didn't graduate. Like, first off, that's a 

really, really hard thing to ask of someone, right? The 

emotional labor that goes into like a public comment to 

come and sit in front of a bunch of people in suits and 

be like, I didn't graduate and I'm poor and please help 

me like, not a fun time. Like not a fun time. It's a 

whole lot easier to come and be like, Yeah, I'm a hero 

and I'm trying to get PSLF and I'm going to come 

comment. So I just want to like, really really put that 
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there, and then, you know, my question is, where are we 

going from here, right? Like if this is like some type 

of like zero sum game with like a limited amount of 

resources, like do we have options? Like is this like a, 

you know, if then kind of situation where if we messed 

with the lever here or like, can you give us some on 

forgiveness or do we have to like, do we have to make 

choices? Because I feel like right now we all want to 

have a conversation like broadly about like, these are 

all the things that we want, but we're also not really 

being giving information on if there's really anything 

and my fear with starting piece by piece is that if we 

don't have any idea of where we can go, then like the 

the negotiating power. Right? And I just I think that 

that that 10 years to forgiveness, I don't think that 

even lowering it to 10 years would would eliminate the 

need for PSLF because PSLF is for folks who have you 

know, the potential for the whole program was just 

created so that people would be incentivized to go into 

nonprofit nonprofit when they could go (inaudible) 

private sector. And I just like we shouldn't talk about 

IDR as the pathway to PSLF right, like the IDR, should 

be the pathway to forgiveness and way out of debt. And 

it's not. In 20 years like that's like that's a really 

long time, like 20 years. Like I'm thirty-one right now 
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and I'm going to graduate this year. That means that 

like three minutes. Thank you, Michaela. Joe, please go 

ahead.

MR. SANDERS: Hi, I'm just going to 

kind of make some structural suggestions that I think 

might actually help us move towards consensus. First 

one, I think that there are a number of areas where 

feedback from the Department could help us get towards 

consensus if we can know what the Department was 

thinking on. Why they're not comfortable going below 20 

years, if we could answer Jaye's question that she put 

in the chat about authority. That will help people 

understand where the Department is and help us move 

towards the Department right good faith negotiation. 

Along those lines, you know, one of the things the 

Department commented on in the issue paper here was that 

they had considered monthly or annual forgiveness, but 

felt they didn't have the authority. I've been doing 

some reading on authority and was looking at settlement 

and compromise authority. There's a good memo that was 

out last week from the Student Borrower Protection 

Center, which I dropped in the chat, which addresses, so 

(inaudible) authority, the question that I have for the 

Department is whether that authority could be used to do 

monthly or annual forgiveness. I take Persis's point 
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that seeing balances go up is a real dissuasion for 

people to get into IDR. I definitely see that with the 

complaints that we get to the state attorneys general, 

so we'd love to get some feedback from the Department. 

Absolutely happy to work with you guys to try to come 

towards consensus.

MS. MACK: Thank you, Joe. Jaye, 

please go ahead.

MS. O'CONNELL: Thank you, so I had 

dropped in the chat the question regarding the counting, 

the underlying FFEL payment for forgiveness and just not 

understanding the statutory authority because it's never 

been that way. My understanding was that that connected 

to the fact that FFEL loans were never authorized under 

the Higher Education Act or Income Contingent Repayment. 

So I wanted to understand that. I also had a question on 

the default, the default piece and IBR for defaults. I 

was assuming that was DL only, but I wanted to clarify 

if that is the case. I can put that question in the chat 

too.

MS. MACK: Thank you, Jaye. Persis, 

please go ahead.

MS. YU: So I was, when when Jaye 

posted the question in the chat, I've been frantically 

trying to search for the statutory authority because I 
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concur with the Department on its legal authority to 

include underlying FFEL payments. I believe the, in 

fact, I don't have the statute in front of me, so I'm 

doing this from memory. So forgive the slightly clumsy 

way of doing this. But the Income Based Repayment 

statute, in fact, says that any payments a borrower 

makes under the IBR plan shall count towards 

cancelation. And so to my mind, whether because it's 

about a borrower and not about a payment made on a loan, 

which is distinct from the way that PSLF is, counts 

payments where that's talking about payments on a loan. 

But in the IBR statute that explicitly talks about 

payments made by a borrower under the IBR statute, which 

to me says that it doesn't matter whether or not the 

loan has been consolidated or not that those payments 

have to count. The Income Contingent Repayment is quite 

broad in terms of what what can count, and so I believe 

that there is good legal basis for counting the 

underlying payment, the payments made on a FFEL loan 

that have then been consolidated into a direct loan for 

both the IBR program and for the ICR statute. I'm happy 

to go back over lunch time to actually dig out those 

statutes and point to the precise language. But I do 

want to talk more about the interest piece and one 

technical question that I have because Jennifer in your 
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when you discussed how we're treating interest of 

interest subsidies for zero-dollar payments, you said 

that all paying all interest for zero dollar borrowers 

would be paid by the Department. Whereas I believe as I 

read the statute and tell me if I'm wrong, that it's 

only on the subsidized loans portion of the interest. 

And so even zero-dollar borrowers with zero dollar 

payments in ICR would still owe interest on their 

unsubsidized loans. And I think this again leads to a 

layer of complexity for borrowers where because REPAYE 

covers some amount of unpaid interest, but it doesn't 

distinguish between subsidized and unsubsidized. It 

would be nearly impossible for our service or to walk a 

borrower through which program is actually going to be 

most advantageous for them. And I think that's a huge 

problem that even a borrower under, you know, the

threshold with a zero-dollar payment can't distinguish 

which plan is better, I think is a huge problem. But I 

think more problematically is fundamentally is that the 

interest subsidy creates, and I think that all unpaid 

interest needs to be subsidized. The fact that balances 

continue to grow is a huge problem, and it leads to a 

debt trap because again, you're talking about 20 years 

forgiveness. Too many people fail, and when they fail, 

that interest becomes something that they have to pay 
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and they're going to pay them through their child tax 

credits that their earned income tax credits for their 

Social Security benefits. And so that's a huge problem 

for low income defaulted borrowers in particular who are 

the population that you claim to want to protect in this 

plan. Thank you.

MS. MACK: Thank you, Persis. I want 

to welcome Alyssa to the table on behalf of financial 

aid administrators at postsecondary institutions. Carol, 

please go ahead.

DR. COLVIN: Thank you. Would it be 

possible for the Department to consider not the level of 

education, but to possibly restructure that language to 

use an original loan cap amount for subsidized and 

unsubsidized loans borrowed to better address the 

inequities that we were discussing? I would suggest 

considering a cap of the undergraduate loan limits the 

57/5 that we're aware of, plus the equivalent of two 

years of graduate level and sub loans, which is twenty 

thousand five hundred per year. Or at least ask that the 

Department consider the undergraduate aggregate loan 

limit cap of 57/5, which would still afford the 

Department the same protection against high balances 

that they're seeking. But it would take into 

consideration low-income borrowers who were full Pell 
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eligible and possibly able to complete an undergraduate 

degree without exhausting their aggregate loan limits. 

As previously mentioned, the rationale for removing 

graduate students is the expectation that graduate level 

education has the ability to move them to middle class 

income. However, we know that it's less likely for 

students of color. And unfortunately, it does not 

address at all the situation where graduate education 

has started, but never completed. I believe that if 

unable to allow for graduate level loans as a whole, 

this may allow for at least some consideration of those 

disparities that exist among students of color while 

obviously not resolving the issue, but also ask for 

consideration of forgiveness at 15 years as I believe 

that was approved by the prior administration, which I 

think would indicate that it's feasible and then using a 

tier past that point as Persis suggested.

MS. MACK: Alright, thank you, Carol. 

Any other comments, questions at this time? Okay. Here's 

what I'd like to suggest. Why don't we take a quick 

five-minute break, come back, invite any more questions 

or comments, and then I'd like to invite some feedback 

to the part from the Department as we've had a number of 

questions and solicitations for for some thoughts from 

the Department. And we'll do that before we move into a 
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consensus check before lunch. Alright. So I have mine, 

11:28. Let's come back at 11:35 and we'll pick right up 

here. Alright. Thank you all, I hope you were able to 

step away and enjoy a bit of a break. I want to pick up 

in the conversation just where we left off. We we've 

gone through a number of comments, questions, ideas from 

the committee and there have been some requests for some 

feedback from the Department. So Jennifer, I would like 

to invite that at this time if you have feedback to some 

of the concerns and questions that have been raised by 

the committee.

MS. HONG: So I know that there was a 

lot of questions regarding the 20 years to forgiveness. 

I will say that the main point of this proposed plan is 

that we've lowered monthly payments significantly. And 

just just as a reminder, I mean, this is this is a 

repayment plan. I mean, the statutory is not explicit 

about forgiveness. It's interpretation that the 

Department has made over the years, and we've included 

that and we felt like 20 years if if we could lower the 

payments significantly, which I think we've achieved 

through this proposal, this through this proposal, that 

20 years is a reasonable timeframe. I I hear the 

concerns regarding the timeframe. And we found that it 

was less of a concern given the fact that we are able to 
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lower the monthly payments so significantly and save the 

borrower, target the borrowers, the lower income 

borrowers. But also those benefits apply across the 

board through this marginal assessment. So that that is 

one point I just want to just emphasize again that we've 

included deferments or forbearances. Months when 

borrowers have been steered into forbearances, we've 

made that explicit in the regulation. To Joe's point, 

the language that we've proposed, and again, we are 

looking at the language, the retroactivity language that 

you're proposing for the forbearance steering, however, 

we feel like our proposal addresses it both ways. And I 

think we have to keep it in there for prospective 

instances as well. So we stand we stand by that process 

and the fact that we have the authority to make those 

account corrections for borrowers that have been steered 

into forbearances. Again, the inclusion of defaulted 

borrowers can use an IBR Kayla zero-dollar payment Soren 

forgiveness. The issue with the income protection again 

on increasing it, I will say that when we when we talked 

about this in the past, again, we've we've we've noticed 

that there's little to no marginal benefit as income 

protection gets higher for the lower income borrowers. 

And so by doing the marginal assessment, I think we're 

capturing a lot in terms of both again, the targeted and 
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everybody else in terms of saving money monthly every 

month on the payments that they're making again, 200 

percent of income protection up to the the poverty level 

and then a marginal assessment thereafter. Five percent 

for two hundred to three hundred, 10 percent everything 

else thereafter. Persis, you're right, the subsidy on 

paid interest is limited to direct subsidized loans. We 

won't reset payments if the borrower consolidates, 

that's to the extent that Jaye's questioning our 

authority to be able to do that, and I'm going to have 

Brian talk about that authority as well when I finish. 

Again, count payments on IBR while on default, we have 

the whole harmless procedures and auto-enrolment into 

IDR so, I'll just stop there. I don't know if that 

addresses some of your concerns. We have some of the 

questions in the chat. We're happy to look back, but 

I'll pass it off to Brian regarding it based on 

authority.

MS. MACK: Thanks, Jennifer. Brian, 

please go ahead.

MR. SIEGEL: Okay. As Persis started 

explaining it under Section 493, C (inaudible) 7 of HEA 

periods in which in borrowers' and IBR count towards 

forgiveness and our regulation, our proposed regulation 

would count those periods on a FFEL loan if the borrower 
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then consolidates into a direct loan. Sometimes the 

Department. I mean, the Department has in the past taken 

what the borrower did on underlying loans into 

consideration on the consolidation loan. And sometimes 

it doesn't. In this case, we are changing it to provide 

to count those periods in which the borrowers and in IBR 

on a FFEL loan towards forgiveness once on the 

consolidation loan. I note that both the IBR statute and 

Section 455 D or E provide that both, in that payments 

made by a borrower on a on a 10-year plan, the standard 

10-year plan count toward forgiveness in both IBR and 

ICR. So the Department under its regulatory authority, 

is including payments on made under an IBR plan or 10-

year standard plan on a FFEL loan towards cancelation of 

the direct consolidation loan. We figure that's both 

consistent with our past regulations and consistent with 

our statutory authority. In regard to your second 

question about applying default or providing ICR to a 

defaulted borrower, this is a change to the direct loan 

regulations, and the direct loan statute specifically 

provides that the Department can require a defaulted 

borrower to repay under ICR. So we believe that that's 

clearly consistent with that statutory authority. More 

broadly, the Department, when it's when it holds a 

defaulted loan, works with borrowers in a multitude of 
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ways to try to get a payment plan that works for them. 

And so we may provide a FFEL borrower what appears to be 

similar to an ICR plan in an appropriate case when we're 

trying to to collect on the loan.

MS. MACK: Thank you, Department, 

Jennifer and Brian, I want to acknowledge that David's 

come back to the table for state higher education 

executive officers and state regulators. And I want to 

invite the committee if there are any additional 

questions or comments at this time, having heard this 

piece from the Department. Michaela, please go ahead.

MS. MARTIN: Just prior to the break, 

you said we would just move to consensus. And I'm just 

wondering if there are any pieces in which like, is this 

really like less of a negotiation and more of like, this 

is what it is and we vote on it now. And that's it. 

Because I just don't feel like that we have like. I do 

acknowledge that there are some really great pieces in 

this and that there were some expansions, but I meanMS. MACK: Yeah. Let me try to speak 

to that Michaela. Doing a consensus check does not mean, 

in fact, that there's not a negotiation. There's been 

discussion and negotiation in the prior two sessions and 

then we have this paper here. All of the work that's 

been done thus far has led us to this point. The initial 
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consensus check is to see where the parties are and if 

they can support what is being proposed. If anyone 

dissents and expresses a serious reservation then we 

pick up with the discussion there, we ask that 

individual to articulate their serious reservation and 

what idea or proposal does in fact get them to here. So 

it's not an end of the road, but it is a very clear 

indication of where each of the constituency 

representatives as part of the committee stand with 

regard to what is specifically being proposed at this 

time. Does that help?

MS. MARTIN: Yeah. And then I also 

just want to acknowledge that like, you know, when we're 

talking about this one is like just a pathway to PSLF 

when we're talking about statutory interpretation, like 

PSLF, like there is not limited to like 501C3s in 

government work. And like we're hearing over and over 

and over again about how there are other folks that that 

are doing what we might consider public service and 

again, particularly in COVID, where we called. You know, 

essential workers, right, they are essential to our 

economy like that is a public service, not not just even 

during COVID, but like all labor in our and in the world 

in which we've created here, you know, is is important. 

And so limiting this to qualification of you can get 10 
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10 years to forgiveness if you happen to write for an 

organization that we think is worthy, even though there 

are still organizations that are, like, very 

controversial, that are 501C3s and you can get loan 

forgiveness under, you know, like the NRA and 

(inaudible) right there are like opposite ends of the 

spectrum, right? But those both get loan forgiveness. 

But if you work for a for-profit hospital like, then you 

don't like the way that we're delineating what is worthy 

in our society is just really, really concerning to me. 

And it really hurts that that in order to get that 

forgiveness, you have to be good enough. And I just I 

wish that we could we could really challenge that and 

give a way out of debt and an affordable education to 

everybody.

MS. MACK: Thank you, Michaela. 

Persis, please go ahead.

MS. YU: I just want to echo well, I 

echo both of Michaela's concerns, certainly about the 

time to forgiveness, but I think more procedurally, the 

call to a consensus check right now feels very 

premature. This is the first week in which we've had any 

language and any actual answers about what the 

Department considered to be the reasonable time towards 

cancelation about what they consider to be the repayment 
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amount, about this is the first time we've heard about 

the exclusion of graduate borrowers. This does not feel 

like a negotiation like we've had with the other with 

the other topics. I think that Income Driven Repayment 

has gotten short shrift in the conversation. And and to 

Michaela's point, there are a lot of people who are 

really counting on this plan working for them, and we 

have given it all of one morning where we've actually 

had language to respond to. And I think that it deserves 

more time and I think we deserve to have more time and 

more feedback from the Department.

MS. MACK: Thank you, Persis. David, 

please go ahead.

DR. TANDBERG: I just want to bring 

attention to a comment by Joe in chat. I would love to 

start working the red lines and trying to compromise on 

things and negotiate on these points. That way, we can 

find out where the line is for the Department. Maybe we 

can nudge things towards consensus, but you know, if 

there is a few points and we could just start ticking 

them down and try to see if there is negotiation to 

have, that would be great and and and if possible, 

actually change the red lines to reflect any compromise 

among the committee members. I would just echo that.

MS. MACK: Thank you, David. Any other 
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thoughts from the committee that you'd like to share 

this moment? Department, do you have any initial 

feedback based on the suggestions in terms of what's 

being shared out by the committee members now or would 

you like a moment?

MS. HONG: So I mean, I think how you 

characterized it is good Kayla, I mean, like we this 

document in front of you is an outcome of everything 

that came before it in terms of our discussion in 

session two. So we went back and we considered 

thoughtfully everything that was raised in Session two, 

and this is where we landed. It's still a negotiation. 

We are in the third session. I understand the concerns. 

I do. I know I keep repeating them. There's some really 

important changes from Sessions two and three that we 

wanted to include, but we did prioritize lowering the 

monthly payment. And I think that is I think that's 

important to note because by lowering the monthly 

payment that makes a 20-year repayment timeframe more 

feasible. And so that is, you know, in terms of the 

questions of, you know, why 20 years for forgiveness. 

That's why, because it's it's and again, just to keep in 

mind, this is a repayment plan and we want to make this 

work for for all borrowers. That being said, we did have 

from the outset some priorities, some some population 
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that we want to focus on. And I think that's important 

given the different levers that we can pull and what we 

find as the income protection grows, that that is 

marginal benefit, little to marginal benefit for those 

lower income borrowers. And that really those the 

benefits accrue for higher income borrowers. So we 

landed at 200 percent. That being said, I mean, we're 

we're open to hearing. I think the purpose of the 

consensus check is to see what the sticking points are. 

I feel like I understand it from this conversation and 

so I mean, we can take it, but we are, what is this 

Tuesday, so I don't know the extent to which or what 

what what's being proposed to change. And I would have 

to go back to see whether we could take it or not take 

it, but we're still in negotiation here.

MS. MACK: Thank you, Jennifer. 

Justin, Please go ahead.

MR. HAUSCHILD: Yeah, thanks. And I 

might differ from a number of my negotiator, FFEL 

negotiators here in this proposal, but I mean, I 

generally support Joe's idea of taking a look at some 

specific language. But I guess I would just pose the 

direct question of the Department right now on whether 

or not they're willing to engage in that type of 

exercise at this point, because if they're not, frankly, 
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then I just propose we do a consensus check with the 

hopes that the Department comes back to us with updated 

regulatory text when we circle back on this later this 

week so that we can execute on that still being a 

negotiation. So I mean that that's what I would propose. 

So the direct question of Department is, are you willing 

to go forward with any type of red lining right now?

MS. MACK: Thank you, Justin. Persis.

MS. YU: So I think I I'm happy to do 

the consensus check if we're going to circle back later. 

I do think it's worth just reiterating the stated goals 

of the Department are not what this regulation 

accomplishes. It seems pretty arbitrary, given how 

devoid it is of the data, you know, so you know, the 

Treasury did a pilot a couple of years ago looking at 

defaulted borrowers, and it found it found that like 

half of borrowers would have a zero-dollar payment, 

which says to me that like while I don't want to dismiss 

it like, I think the payment amount is very important, 

but it's not the only thing that's making borrowers 

default. And so this is not responsive to what is making 

borrowers default. It is not simply the payment amount. 

The payment amount is incredibly important, and we've 

heard that time and time again that a lot of people 

cannot afford the payments. But that is not the only 
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thing given the number of borrowers that we know that 

default, who would have zero-dollar payments under the 

current plans. And the other piece that I think this is 

related is when we looked at the at the data before, you 

know, we considered borrowers with a $50,000 income to 

be high income borrower. So I think we have a just a 

definitional problem right now about thinking about who 

is a low income borrower because in most parts of the 

country, someone with a $50,000 annual income is 

actually considered low income. So we base have basic 

definition problems and I and so I would like to push 

back on whether or not the Department even the stated 

goals of the Department are accomplished by the by the 

regulations that they've proposed.

MS. MACK: Thank you, Persis. We are 

three minutes from lunch. Okay, go ahead, Jennifer.

MS. HONG: Maybe, maybe, yeah, I 

didn't realize how close we are to lunch, we can go to 

lunch and we could pick back up on this after lunch.

MS. MACK: This is what I was I was 

going to suggest. I want to encourage you all to think 

of the consensus check as the committee expressing their 

agreement or dissent with what is currently being 

proposed. If we're in consensus, we'll move forward if 

we are not, we will invite and ask and basically charge 
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the blockers or the dissenters to providing red lines 

that would help us get to to consensus. So I don't want 

anyone to think that if we take a consensus check, it 

prevents the opportunity for red lines and further 

discussion during this session. I hope that that helps, 

but given that we are so close to lunch, I don't want to 

push for the consensus check now and would suggest that 

we come back after lunch and circle back to that. But 

Jennifer, please go ahead.

MS. HONG: Wait. Yeah, let's we'll 

talk more after lunch and I'll go. I just don't want 

anybody to spend their lunch working on red lines 

either.

MS. MACK: Sounds good. Alright, we 

will return at the top of the hour. Michaela, go ahead.

MS. MARTIN: I just think a lot of us 

have already submitted the red lines. Like I did, Persis 

did, like the folks that you're hearing, like most 

vocally right now, and if someone didn't specifically 

submit a red line, it's likely because it was already 

covered in someone else's. So like that red line exists 

and you have it and it's on the website. Also, like, 

we're not taking a consensus check before lunch, 

correct?

MS. MACK: We are not.
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MS. MARTIN: Okay.

MS. MACK: Suggested that we come back 

after lunch and do that. If that works for all of you. 

Okay, then let's go to lunch, we'll see you at the top 

of the hour.
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Appendix

Department of Education

Office of Postsecondary Education

Zoom Chat Transcript

Affordability and Student Loans Committee

Session 2, Day 2, Morning, December 7, 2021

DISCLAIMER:

Note: The following is the output of transcribing from a 

recording. Although the transcription is largely accurate; 

in some cases, it is incomplete or inaccurate due to 

inaudible passages or transcription errors. It is posted as 

an aid to understanding the proceedings at the meeting, but 

should not be treated as an authoritative record.

From David Tandberg (P) - State hi ed agencies to 

Everyone:

+1 to everything from Joe above

From Rajeev Darolia - Advisor Econ & Data to Everyone:

@David -- I am not aware of research that examines 

this systematically. I will look to see if I can find 

anything on this

From Joe (P) State AGs to Everyone:

Daniel made the point that Pell eligibility is at 400% 

of poverty level

From Daniel (P) - Fin Aid Admin (he/him) to Everyone:

Joe, I will address that in my comment...

From David Tandberg (P) - State hi ed agencies to 

Everyone:

@Raj - did Judith Scott Clayton provide data on this.
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From David Tandberg (P) - State hi ed agencies to 

Everyone:

?

From Joe (P) State AGs to Everyone:

TY Daniel!

From Persis (P) - Legal Aid (she/her) to Everyone:

To clarify the proposal only covers the unpaid 

interest on Subsidized loans only, correct?

From Anne, (P), State DOCs to Everyone:

I have to leave the meeting temporarily and will be 

back.

From Joe (P) State AGs to Everyone:

I have the same Q

From Rajeev Darolia - Advisor Econ & Data to Everyone:

@David -- not that I am aware of (much of her work 

started with a sample of undergraduate borrowers).

From Michaela Martin to Everyone:

This doesn't effect students...

From Joe (P) State AGs to Everyone:

How is forbearance steering addressed?

From Michaela Martin to Everyone:

Most students don't make payments while they are 

students as far as I can tell

From Joe (P) State AGs to Everyone:

Hold harmless is a start, but we can’t put the burden 

on students who were steered by other parties to jump 

through new bureaucratic hoops
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From Misty (P) Priv. Non-Profit to Everyone:

The Trump administration had forgiveness after 15 

years with 12.5% discretionary income payment.

From Joe (P) State AGs to Everyone:

Moral hazard concerns are not an issue if forbearances 

are counted retroactively and not prospectively

From Bethany (P), Disability (she/hers) to Everyone:

Which of the issues we've IDed are we starting with?

From Joe (P) State AGs to Everyone:

I’m comfortable addressing the issues in the order I 

put them in the chat

From David Tandberg (P) - State hi ed agencies to 

Everyone:

Agreed

From Bethany (P), Disability (she/hers) to Everyone:

Fine w/ me!

From Marjorie (P), 4 Yr Public Insts. (she/her) to 

Everyone:

Why make it exclusive when it can be inclusive of all 

borrowers? I do not understand the rationale for 

adding language that would also create more confusion 

for borrowers.

From Misty (P) Priv. Non-Profit to Everyone:

Agree with that order too

From Michaela Martin to Everyone:

What was that order?

From Bethany (P), Disability (she/hers) to Everyone:
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• reduce time to forgiveness (why is ED not 

"comfortable" going less than 20 years?); 

• increase the percentage of protected income;

• include grad loans in EICR;

• count forbearances (at a minimum 

retroactively); and

• treat married borrowers in EICR like PAYE and 

not REPAYE.

From Michaela Martin to Everyone:

Agree on the order

From Heather-PSLF Advisor to Everyone:

$

From Persis (P) - Legal Aid (she/her) to Everyone:

Agree with David's question

From Joe (P) State AGs to Everyone:

That is in part because of poor administration and 

bureaucratic hurdles

From David Tandberg (P) - State hi ed agencies to 

Everyone:

I think we could accomplish the Department's goals 

plus more all in one reform.

From Bethany (P), Disability (she/hers) to Everyone:

+1 Michaela

From Joe (P) State AGs to Everyone:

If we are not retroactively counting long term 

forbearances, we are not helping the borrowers the 

Department wants to prioritize

From Suzanne Martindale (A) state regulators to 

Everyone:
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Negotiated Rulemaking - 12/07/21

+1 michaela

From Carol (A)-Proprietary to Everyone:

+1 Daniel

From Joe (P) State AGs to Everyone:

+1 Daniel

From Bethany (P), Disability (she/hers) to Everyone:

+1 Daniel

From Joe (P) State AGs to Everyone:

+1 Daniel on interest as well

From Bethany (P), Disability (she/hers) to Everyone:

+1 Daniel on interest as well

From David Tandberg (P) - State hi ed agencies to 

Everyone:

+1 Daniel

From Michaela Martin to Everyone:

Also just - Sam is only on default bc payments under 

current plans are hundrds of dollars. Bringing it down 

is great

From Joe (P) State AGs to Everyone:

Goals are not aligned with the structure

From Daniel (P) - Fin Aid Admin (he/him) to Everyone:

Can we move the marginal rates on payment to 250% / 

400% rather than 200% / 300%. Rationale - match the 

highest eligibility ratios for Pell maximum and Pell 

minimum under the new SAI calculation.

From David Tandberg (P) - State hi ed agencies to 

Everyone:
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Negotiated Rulemaking - 12/07/21

My alternate, Suzanne, will be replacing me now.

From Bethany (P), Disability (she/hers) to Everyone:

+1 Joe on the process issues--have heard this from 

several legal services / P&A (legal services for 

people w/ disabilities) folks

From Persis (P) - Legal Aid (she/her) to Everyone:

+Agree w/ joe we should just count forbearances 

retroactively

From Christina, she/her (A) 2-Year Public to Everyone:

I am stepping in for 2 year public

From Daniel (P) - Fin Aid Admin (he/him) to Everyone:

COLA (cost of living allowance) adjustments from the 

Department of Military -

https://www.defensetravel.dod.mil/Docs/perdiem/browse/

Allowances/COLA/CONUS/Locations/cclocs21.pdf

From Daniel (P) - Fin Aid Admin (he/him) to Everyone:

We could use a COLA allowance to make adjustments to 

the base rates.

From Dixie (P) Dependent Students to Everyone:

In Orange County most 1 bedroom and many studio 

apartments start at $1,500

From Joe (P) State AGs to Everyone:

+1 Marjorie

From Jeri (P) Student Borrowers (she her, they) to 

Everyone:

+1 Marjorie

From Jaye (P) FFEL Agencies to Everyone:

Since FFEL loans are not ICR eligible, we've 
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Negotiated Rulemaking - 12/07/21

understood that counting payments on the underlying 

loans is not supported by the HEA. Can ED clarify 

statutory authority?

From Justin (P) Servicemembers and Veterans to Everyone:

+1 Persis regarding scaled time to forgiveness and 

hearing from department about that

From Bethany (P), Disability (she/hers) to Everyone:

+1 to Persis on scaled time

From Joe (P) State AGs to Everyone:

+1 Suzanne on servicing and debt collection costs

From Bethany (P), Disability (she/hers) to Everyone:

+1 to Michaela

From Daniel (P) - Fin Aid Admin (he/him) to Everyone:

+1 to Michaela. That's why I suggest 10 years to 

forgiveness for IBR as well!

From Daniel (P) - Fin Aid Admin (he/him) to Everyone:

Stepping away from the table. Alyssa will be stepping 

forward.

From Joe (P) State AGs to Everyone:

Agree with Persis on statutory authority to count FFEL

From Jaye (P) FFEL Agencies to Everyone:

Will IBR on defaulted loans be for the Direct Loan 

program only?

From Suzanne Martindale (A) state regulators to 

Everyone:

+1 persis, balances are artificially growing

From David (P) - State hi ed agencies to Everyone:
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Negotiated Rulemaking - 12/07/21

I have rejoined the table

From Bethany (P), Disability (she/hers) to Everyone:

+1 (I just want to support this change!)

From Joe (P) State AGs to Everyone:

Can we consider some specific language changes that 

would move us toward consensus? Let’s work with a 

redline.

From Alyssa Dobson to Everyone:

+1 Joe!

From Jeri (P) Student Borrowers (she her, they) to 

Everyone:

+1 Joe

From David (P) - State hi ed agencies to Everyone:

+1 Joe

From Misty (P) Priv. Non-Profit to Everyone:

+1 Joe it's hard to vote without knowing which of our 

concerns can be addressed

From Suzanne Martindale (A) state regulators to 

Everyone:

+1 - are any of these items open to revision?

From Bethany (P), Disability (she/hers) to Everyone:

+1 to everyone

From Michaela Martin to Everyone:

This makes little financial sense tome..Why make a 

loan worth so little and have gov pay servicers for 20 

years for little to no return on investment

From David (P) - State hi ed agencies to Everyone:
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Negotiated Rulemaking - 12/07/21

That's fine with me too

From Suzanne Martindale (A) state regulators to 

Everyone:

+1 persis 

From Bethany (P), Disability (she/hers) to Everyone:

+1 to Persis on the amount of income that makes 

someone low-income