Negotiated Rulemaking 10/8/2021

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DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

AFFORDABILITY AND STUDENT LOANS COMMITTEE

NEGOTIATED RULEMAKING SESSION 1, DAY 5, MORNING

OCTOBER 8, 2021 

On the 8th day of October, 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. 

P R O C E E D I N G S 

 MS. JEFFRIES: Good morning, everyone, I'm 
Negotiated Rulemaking 10/8/2021

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Commissioner Cindy Jeffries from FMCS and I will be your 

facilitator for this morning session. I'd like to welcome 

everyone back. It has been a long week, it is Friday. So, we're 

going to try to move through the rest of what we have to cover 

this week. And we will start with roll call and then I will 

outline the agenda for today. So, I'll call out the constituency 

please give your first name and we will move on. Department of 

Education?

 MS. HONG: Good morning, welcome back 

everybody. Jennifer Hong.

 MS. JEFFRIES: Accredited, accrediting 

agencies?

 MS. PERFETTI: Good morning, Heather 

Perfetti.

 MS. JEFFRIES: Dependent students?

 MS. SAMANIEGO: Good morning, Dixie 

Samaniego.

 MS. JEFFRIES: Good morning. Family federal 

education loan lenders and/or guaranty agencies? 

 MS. O'CONNELL: Good morning, Jaye O'Connell. 

 MS. JEFFRIES: Good morning, Jaye. Financial 

aid administrators at post-secondary institutions?

 MS. DOBSON: Morning, Alyssa's here. 

 MS. JEFFRIES: Good morning, Alyssa. Fouryear public institutions?
Negotiated Rulemaking 10/8/2021

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 DR. DORIME-WILLIAMS: Good morning, Dr. 

Marjorie Dorime-Williams.

 MS. JEFFRIES: Independent students?

 MS. MARTIN: Good morning, Michaela Martin, 

and I will be on camera shortly.

 MS. JEFFRIES: Okay, thank you. Individuals 

with disabilities or groups representing them?

 MR. WHITELAW: John Whitelaw, I'm sitting in 

as Bethany's alternate for the day.

 MS. JEFFRIES: Thank you, John. Legal 

assistant organizations that represent students and or 

borrowers.

 MS. YU: Morning, Persis Yu for legal aid 

organizations.

 MS. JEFFRIES: Good morning. Minority-serving 

institutions.

 MS. GONZALEZ: Good morning, Noelia Gonzalez.

 MS. JEFFRIES: Good morning, Noelia. Nonprofit institutions?

 DR. McTIER: Good morning. Dr. Terrence 

McTier.

 MS. JEFFRIES: Good morning. Proprietary 

institutions?

 MS. BARRY: Good morning. Jessica Barry

 MS. JEFFRIES: Good morning, Jessica. State 
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attorneys general?

 MR. SANDERS: Joe Sanders of AGs.

 MS. JEFFRIES: State higher education 

executive officers, state authorizing agencies and/or 

regulators?

 MR. TANDBERG: Good morning, David Tandberg. 

 MS. JEFFRIES: Good morning. State lo -- loan 

borrowers?

 MS. O'BRYAN-LOSEE: Student loan borrowers? 

Happy Friday everyone, it's Jeri O’Bryan-Losee.

 MS. JEFFRIES: Thank you. Two- year public 

institutions?

 MR. AYALA: Good morning, Bobby Ayala.

 MS. JEFFRIES: Good morning. US military 

service members, veterans or groups representing them.

 MR. HAUSCHILD: Morning, Justin Hauschild. 

 MS. JEFFRIES: Thank you. Did I miss anyone? 

Yay. So, Alyssa I see David or Daniel signed in, you, you will 

be sitting in for this morning for Daniel?

 MS. DOBSON: I guess he wasn't running as 

late as he thought so I can swap back with him now.

 MR. BARKOWITZ: She is completely capable., 

but I'm happy to fill in the table again so, sorry about that.

 MS. JEFFRIES: No worries. Thank you, Daniel. 

 MR. BARKOWITZ: A little bit of puppy drama 
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this morning, so I apologize to the committee.

 MS. JEFFRIES: Okay, sounds good. So, the 

agenda that we have for today would be to finish issue paper 

number 10 on creating a new IDR plan, and that would be 

questions seven, eight and nine, then we would move to issue 

paper 11 on false certifications. And finally, towards the end 

of the day, the Pell Grant issue. Persis?

 MS. YU: Thank you. I'd like to request a 15-

minute caucus. I would like to request that with accrediting 

agencies, with, with the negotiators from accrediting agencies, 

with family fed -- federal family education loan lenders and/or 

guarantee agencies, with financial aid administrators at postsecondary institutions, with four-year public institutions, with 

minority-serving institutions, with private nonprofit 

institutions and with proprietary institutions and two-year

public institutions.

 MS. JEFFRIES: Okay, thank you, Joe. You're 

on mute, Joe.

 MR. SANDERS: Sorry. Yeah, I'd also like to 

request a caucus with everybody else. That is not on Persis' 

caucus, and I want Josh in mine.

 MS. MACK: Okay, Joe, are you requesting Josh 

from legal assistance organizations?

 MR. SANDERS: Correct. I am, I'm stealing 

Persis' alternate.
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 MS. MACK: Persis, are you comfortable with, 

with that and Josh comfortable with that division there?

 MS. YU: Yes.

 MS. MACK: Okay, so Brady, I know that you're 

probably creating those, if it's helpful, I'll go through names 

of who should be assigned to which ones?

 MR. ROBERTS: Yeah, I think I got most of 

them, but I just want to make sure I don't have anyone missing.

 MS. MACK: Okay, committee members, you can 

correct me if I'm wrong, but in the first breakout room, we 

should have Heather Perfetti, Persis is it your intent to 

include all alternatives as well?

 MS. YU: I leave that up to the discretion of 

those, of those seats.

 MS. MACK: Okay. Then for accrediting 

agencies we have Heather Perfetti. Are we going to include the 

alternate Michale McComis, Heather? That's a yes, so please note 

them. For federal family education loan lenders, we have Jaye, 

and alternate Will. Okay, Jaye, I got a nod. For financial aid 

administrators, we have Daniel. Daniel, are we including your 

alternate Alyssa?

 MR. BARKOWITZ: Yes, please.

 MS. MACK: Okay.

 MS. JEFFRIES: Thank you, Daniel, for saying 

that verbally. For the record, I would request that all 
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committee members if you're going to include your alternate that 

you state your response yes or no.

 MS. MACK: Thanks, Cindy. For four-year

institutions. We have Marjorie, Marjorie, we're including, are 

we including Rachel?

 DR. DORIME-WILLIAMS: Yes. 

 MS. MACK: Okay, perfect. For legal -legal 

assistance organizations, Persis called this we will not include 

Josh in this particular breakout. For minority serving 

institutions. We have Noelia. For private nonprofit institutions 

we have, I believe Misty is absent today, so we'll be including 

Dr. McTier. For proprietary institutions, we have Jessica Barry. 

Jessica, are we including your alternate Carol as well?

 MS. BARRY: Yes, please do.

 MS. MACK: Okay. And then we have two-year

public institutions with Bobby. Bobby, are we including 

Christina?

 MR. AYALA: Yes ma'am, please.

 MS. MACK: Alright. That should be the first 

breakout room Brady. In the second one, we would have Dixie 

Samaniego. Dixie, are we including Greg?

 MS. SAMANIEGO: Yes, please.

 MS. MACK: We'll have Michaela. Michaela, are 

we including Stanley?

 MS. MARTIN: Yes, please. Having technical 
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difficulty this morning, sorry.

 MS. MACK: No worries. Brady, are we good?

 MR. ROBERTS: Yeah, all good.

 MS. MACK: Okay, we're including, I believe 

in Bethany's absence, it'll be John? Got his hand up, alright. 

For state attorneys we have Joe. Joe, are we including Eric?

 MR. SANDERS: Yeah, Eric should be in my room 

please.

 MR. ROBERTS: Got it.

 MS. MACK: Alright, then we have for state 

higher education David. David, are we including Suzanne?

 MR. TANDBERG: Absolutely.

 MS. MACK: Thank you. For student loan 

borrowers, we have Jeri. Jeri, are you including Jennifer?

 MS. O'BRYAN-LOSEE: Yes, please. 

 MS. MACK: And for US military, Justin, can 

we include Emily?

 MR. HAUSCHILD: Just please. Thank you.

 MS. MACK: Alright. Is the federal negotiator 

invited to either of those caucuses? I wasn't clear on the 

second one. No?

 MR. SANDERS: I'm sorry, could you repeat 

that, Kayla?

 MS. MACK: Yes. You, you mentioned all 

remaining individuals on the committee. What about the federal 
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negotiator at this point?

 MR. SANDERS: Oh, I'm sorry. Yes. I'm sorry, 

but I'd like to keep Ed out of my room.

 MS. MACK: For now. Okay, so we have a rough 

estimate of 15 minutes. FMCSs will check in with both parties at 

15 minutes. However, if we can be at assistance, check in with 

you before or you need anything or are ready to conclude early, 

please use the call post button.

 UNKNOWN SPEAKER: (Inaudible) you can pause 

the live feed.

 MS. JEFFRIES: Good morning again I'd like to 

thank the public for their patience while we work through some 

things, and certainly the committee members in alternates that 

worked diligently during that time. So, at this point, what I'd 

like to do is, there is an item that was left from yesterday 

that we need to address and that is the, whether or not the 

committee will be adding additional topics to the agenda. And 

so, what I'd like to do is call on Jennifer from the Department 

of Ed, and let her speak at this time.

 MS. HONG: Okay, thank you, Cindy. I just, 

you know, I just want to reaffirm that the department shares 

these concerns regarding defaulted student borrowers. And we 

also share the desire to ensure that defaulted borrowers are 

able to pay, can make payments within their means. Again, I know 

I mentioned this before, but there are several ways that we seek 
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to address these concerns. So, I just want to bring your 

attention to the fact that we've already added debt collection 

rules to the administration's rulemaking agenda. And I can drop 

that in the chat for you right now. So, I mean, as you can see, 

the reason why we've, the uptake is on a different, different 

rulemaking slate is that these debt collection rules largely 

exist outside of HEA, excuse me. Meaning that they're not 

subject to negotiated rulemaking. So, to Brian Siegel's point 

the other day, our legal counsel pointed out that we are not, 

because we're not subject to negotiated rulemaking for those 

debt collection rules, were able to move a lot quicker in 

advancing our agenda for debt collection. So, this rulemaking, 

again, as we mentioned, the final rules that results from this 

rulemaking would be effectuated, in July of 2023, which is too 

late for the population of bars that we are talking about here. 

So, while we, we support an actual -- we appreciate the 

proposals that have been set forth, we are taking a look at 

them. We have some questions about them just based on our 

initial review. We did note, again, I just want to reaffirm that 

I realize that one of the proposals, at least one, is pertinent 

to our discussion that we're having right now, regarding IDR. 

And I just, I put it back on Persis and her constituency to 

please, come back with proposed language for that relevant piece 

to IDR. And we are open to discussing that. But as far as adding 

those particular issues, to this rulemaking, we feel like it's 
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not, it's not the right place, we don't feel like it will 

advance, we'll be able to move as quickly as we would like to. 

We've already initiated these discussions; they're happening in 

the department. We're going to look at your proposal, we

appreciate all the ideas on there. We'd like to, you know, if

you want to convene a working group on that and keep this 

dialogue going. But we at this point, we have a very, very full 

agenda, we still have two more issues we would like to get to 

today, in addition to the idea of discussion, again, where I 

invite your thoughts on how your proposal, more pertinent to 

IDR, relates to, to our discussion here, and it's sufficiently 

open ended for you to introduce them. So again, just reaffirming 

our commitment to these borrowers, asserting that we are, we are 

having these discussions at the department. We have a rulemaking 

slated to advance that discussion, and we're not subject to 

negotiated rulemaking to advance those rules. So, you know, 

perhaps even some of this could be done on the sub regulatory as 

well. So that is what I have to say and thank, thank you again, 

for bringing up that important issue. We just feel like we, the 

uptake, our uptake for this table is limited in terms of what we 

already have on the agenda.

 MS. JEFFRIES: Thank you, Jen. Persis?

 MS. YU: Thank you, Jennifer, for that that 

clarifying information. I just wanted to ask one question of you

and then somewhat of a procedural question. So as I understand, 
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what you're saying, it sounds like part of, part of my proposal 

can already be done through the current rulemaking and that it 

also sounds like the department would be open to having a 

working group to help explore since I recognize that we do have 

a very limited amount of time that is in the schedule and a lot 

of topics but we could have a working group to further explore 

how the current topics on the table could be utilized in order 

to help defaulted borrowers. Is that, is that what I'm hearing?

 MS. HONG: Yes, I think that's right Persis, 

but that, that would be a separate rail from this, this 

committees work. We just feel like we are stretched with the 

agenda that we have. So, if we could keep it on a separate rail 

and also for you know, for expediency’s sake, as I mentioned for 

those borrowers as well.

 MS. YU: So, can you clarify what you mean by 

like what a working group that as a separate rail would look 

like?

 MS. HONG: We're, we are open to continuing 

to get further clarification on your proposals. We've had a 

cursory look at them. But we're, as you can imagine, everybody 

that would need to take a look at it as engaged in this 

rulemaking. So, we would like to take a closer look, maybe 

bouncing questions back to you, get further clarification on 

some of these ideas? We are happy to do that, and to, happy to 

engage in that conversation.
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 MS. JEFFRIES: Thank you, Jen. Brian?

 MR. SIEGEL: Yeah, just, just following up on 

what Jen said, I think the department further can better 

understand your proposals and how they would affect borrowers 

and how they would affect the process. I, I don't think the 

department can commit to this being like a separate, ongoing 

process for determining our future regulations in regard to the 

debt collection rules, because we're bound by public process, 

we, we have to go through regular public notice and comment 

rulemaking on those rules. And we also are limited in how we use 

working groups and how we use advisory committees under the 

Federal Advisory Committee. This negotiation is actually 

conducted in accordance with the Federal Advisory Committee Act, 

and we're limited to how many we can have at one time. So,

there's certain legal restrictions on it, but you know, within 

those bounds, the department would welcome an opportunity to 

talk with you and other members of the committee on these ideas 

and how they can be worked into how we move forward.

 MS. HONG: Thank you Brian for clarifying 

that. If I get this adjust my comments, then too. I think, I 

think there's, there's questions about the scope. We talked 

about, you know, from, from our cursory understanding looked 

like there was at least one of the proposals we can broach 

within this agenda of IDR. But again, that's a question and, and 

to the extent that it is pertinent to this rulemaking, and that 
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particular agenda. (Audio) IDR, you know, we were happy to 

clarify that, and we think, we just need to have more 

understanding from you and what the actual proposal is there for 

that, for that piece.

 MS. JEFFRIES: Thank you, Jen. David? You're 

on mute, David. 

 MR. TANDBERG: Yeah, I had a couple of ideas 

and questions, but I want to pause and see if it would make 

sense for me to yield to Persis. I didn't know if you wanted to 

jump in with the reaction, or if I should go ahead?

 MS. YU: Go ahead, David. 

 MR. TANDBERG: Okay, so it sounds like it may 

be worthwhile, if we were able to generate more specific 

regulatory language around the two ideas that we could submit to 

the department. And I don't know if we'd need a, a consensus 

check on that. If that would give that a little bit more steam 

within the department to get that moving. And then a working 

group of some sort, I'm a little confused as to what that would 

be, based on what Brian said, but it sounds like the department 

could create something like that for us, because I, I feel like 

we're facing a moment in time that I don't want to miss on 

making these kinds of changes that I think are critically 

important. The ideas that Persis has, has advanced in her paper. 

And so, I want to keep that moving. I'm also, I share the 

concern. I think all of us are like, this is an awesome 
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negotiated rulemaking. The ideas that are on the table are 

tremendous and are going to make students’ lives better. I want 

to recognize that and keep the steam going on the proposals that 

are on the table. And it seems like this idea of advancing the 

regulatory language within the department for your 

consideration, plus the working group, plus, then, continuing 

down the path of the topics that are already on the table might 

be the best path forward. So just putting that out on the table 

as kind of a cohesive idea.

 MS. HONG: Thank you, David. Just to jump in, 

really quick I am, again, I just want to (inaudible), you know, 

in terms of helping you all come up with proposed language for a 

proposal that is pertinent to the existing agenda items on this 

table.

 MR. TANDBERG: I, okay. I guess I had, I saw, 

I saw it as doing that plus continuing to advance the ideas for 

you all in the department for consideration also on the, the 

other idea that you feel like, does not fit within the 

negotiated rulemaking, I don't know if that's possible, also, 

that I think it would be helpful to for the department.

 MS. HONG: Well, keep in mind, we're gonna, I 

mean, when we proceed with debt collection, there'll be a whole 

process to provide that information within the scope of that 

rulemaking, as well. So, to our legal counsels point, we wanted 

to make sure that we're following all our procedures. So, to 
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the, to the (inaudible) that we can keep the issues within the 

scope of this agenda as it pertains to defaulted borrowers, and 

then everything else that we're going to take up, we will have a 

process for soliciting that input from the public and from those 

here on this committee as well. 

 MR. TANDBERG: Okay, I see.

 MS. JEFFRIES: Persis?

 MS. YU: So, I appreciate the, the 

information provided by both Jennifer and Brian. And I would 

like some time to be able to process before deciding how to move 

forward next. So, my suggestion is that I would be willing to 

table this conversation until after lunch to, so that I can go 

back to my constituencies to kind of decide how we would like to 

proceed next, best, if that's okay with (inaudible).

 MS. JEFFRIES: Thank you, Persis. Are there 

any objections to what, looks like we have a path to move 

forward that Persis, she's requested more time to process this? 

She's not bringing anything forward at this moment in time, and 

that we can go ahead and move along with our agenda on 

completion of issue paper number 10, and then move to 11 and 12. 

Any objections. Great, thank you. So, with that, let's go ahead 

and turn our attention to issue paper number 10. I believe you 

just have seven, eight and nine in the question realm to have 

your discussion about. Jen?

 MS. HONG: So, Cindy, I just wanted to point 
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it, point out that we had asked Raj to provide some cursory 

information for us at this session. I think it might be helpful 

for him to kind of lead, lead our discussion with his 

presentation, he's going to provide something more in session 

two, but we'd love to hear from Raj and then we can go ahead and 

proceed with question number seven's plan.

 MS. JEFFRIES: Okay, Raj?

 MS. MACK: Cindy, if I may, I'll just note 

for everyone that Raj has circulated a presentation that should 

be hitting your email inboxes right now.

 MR. DAROLIA: Great, thanks. I'll go ahead 

and share my screen. Can everybody see that? Alright, so what 

I'm going to present today are two things. The first thing is 

just some basic background on some trends in IBR. One of the 

things I wanted to point out, which I think Persis kind of beat 

me to a little bit this morning, was that we do have limited 

information on, especially on demographic characteristics, human

experiences on (inaudible) folks in IBR. So, I wanted to 

summarize just very quickly some of the information that we have

available publicly about IBR trends, and talk a little bit about

some data that could be useful if it was made available. The 

second thing I'm going to do is just walk you through some 

preliminary IBR simulations, just to develop some intuition 

about some of the tradeoffs that we might make if you're going 

to change payment percentages, income protections, or both, at 
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the same time I’ve got an (inaudible) example that I'll walk 

through. Basically, what I want to help folks develop is an 

intuition for all of the inputs for the IBR plan that lead to 

different repayment outcomes for students. And so, you can know 

some of the levers that that are potentially unvaluable 

(inaudible). So, the first thing again just quickly are some IBR 

program trends. The takeaway from this is really just that the 

dollars outstanding and the number of recipients of IBR plans is 

increasing over time. This is from 2016 to present, this is the 

whole federal advantage portfolio, including both direct and 

federal loans, and as a share of total recipients and 

outstanding balances, the IBR program is also growing. So, not a 

surprise to anybody on this call, but clearly an important 

program to think about (inaudible). The next slide here is 

really a subset of the available information on demographics. 

And so, what's not shown here, which is available are some 

characteristics by state. So, we are able to know the total 

amount in outstanding dollars and recipients by state. As you 

can imagine, there's a lot of variation by state. And the other 

thing which I did not show here, which is available, is about 

the age of the debtor. There are some age breakdowns available 

from FSA What I'm showing here are two things on the left here, 

this is just the share of dollars for recipients of IBR plans 

who have partial financial hardship. The trend isn't very 

notable here, it's about flat, but what it suggests is about 70% 
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to 80% of recipients and dollars, a little bit less for 

recipients, do qualify for partial funding. On the right here, 

this is the IDR dollars outstanding by institution type. As you 

can see there is variation across the institution type. It's 

increasing across all sectors, but it's highest, the most amount 

of outstanding debt for students in IBR plans were enrolled at 

public institutions, followed by private institutions, with 

proprietary institutions at the lowest. Now, partly this is a 

function of enrollment as well, especially over time. So, we do 

see variation, again, across institutions. So, the next thing I 

want to do is present some preliminary IBR simulations. You 

know, this is, was just an opportunity for me to nerd out a 

little bit more than I have in the past, so thanks for that 

opportunity. What I want to just highlight here is that these 

are for illustrative purposes. This isn't any specific 

individual. This is really just to give a sense of individual 

repayment scenarios for a fictional debtor that I'm going to 

report. Two other things I want to point out here in these 

simulations is that this does not incorporate common repayment 

events that affect our outcomes, and especially for (inaudible) 

who really matter: periods of unemployment, nonpayment, 

forbearance, deferment, other things that can interrupt 

repayment, which do have a lot of implications for, for 

repayment. And then the other thing is just because another one 

of the issues that is covered in this session is about interest 
Negotiated Rulemaking 10/8/2021

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capitalization, the assumptions related to this are really going 

to be critical, especially for loan forgiveness. So, you know, 

keep that in mind, that, you know, if the committee ends up 

recommending some language that changes interest capitalization, 

this will pull on some levers in IBR forgiveness estimates. So,

with all that in mind, let me introduce you to a fictional 

borrower, who I'm going to call Iris. So, Iris has an income of 

$33,000 a year annually, which equates to about $2,750 monthly. 

We're gonna assume Iris gets about a two and a half percent wage 

increase each year. She has student loan debt of $28,000. As a 

single household, I'm gonna assume an interest rate of 3.73%, 

which is the current rate on direct subsidized and unsubsidized 

loans right now. And then we're also going to make an inflation 

assumption of 2.4% annually, which is about what the CBO 

estimate is for, for inflation. What I've shown here in the box 

underneath here is output that we might get from the FSA student 

loans simulator. What I'm going to show here are actually 

slightly different, just rounding error, really, than what you 

would get in the FSA student loan simulator. This is because I'm 

making some kind of simplifying assumptions largely about 

inflation in this, whereas the student loan simulator actually 

uses yearly estimates of inflation over time. So, we can see if 

we focus on that standard repayment column, Iris would have, if 

she participated in the fixed 10-year repayment plan, a monthly 

payment of about $273. Over the life of her loan, she would pay 
Negotiated Rulemaking 10/8/2021

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about $32,700, and as part of a standard repayment plan, would 

make 120 payments, so the standard (inaudible). Under the 2014 

IBR plan, if she was enrolled in this, her monthly payment would

decline. It would start at $114 a month and increase to $187 

per month. That increase is largely going to be because of an 

increase in income. Assume again, the simulated two and a half 

percent a year. I put that ingredient in just to show that the 

monthly payment would be less per month for Iris under the IBR 

plan. Now we see that the total amount paid would actually be 

higher, right? So, over this 20-year period, the 240 payments, 

Iris would pay about $35,000, over $35,000 (inaudible). 

Partially, this is a function of, of how we think about debt. If

we extend the repayment period, even if it's a lower monthly 

payment, we extend the repayment period, all else equal, we're 

gonna have a total amount that's higher in payment. And in this 

case, we'll have about $8,000 in loans forgiven. And so that's a

forgiveness, that's an investment that the, the government and 

society can make in this person. I will also keep in mind some 

of the discussion before that this might be taxable income for 

Iris in 20 years. So, these are two standard plans and we can 

get that information out of the student loan simulator on the 

FSA website. What I've done here on the right is just break down

the calculation for period one. Again, to try to develop some 

intuition about how the different inputs affect the outputs. So,

the monthly income is $2,750 as I mentioned before. We talked 
Negotiated Rulemaking 10/8/2021

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about it a little bit yesterday, we would look at that table--

of 150% of the poverty line for a single household individual, 

and that's $610. So that would be the amount of protected income 

for Iris. We would subtract out that amount, and she would have 

discretionary income of about $1,140, right? Now, we would take 

an income share of that in the IBR plan, in this case at 10%. 

And the period one payment, then, is $114. So as Iris' income 

increases over time, then her payment would also increase. Now I 

wanted to point out some things on how these inputs effect this 

period one payment or payments in general because I think there 

are some things which are pretty intuitive, and some things that 

we might not think about when thinking about how this 

calculation works. Okay, so the first thing is obviously, the 

monthly income. All else equal, the higher the monthly income in 

an IBR plan, the higher the period one payment would be. But 

another thing to point out here, is that as someone makes more 

money over time, right, that would also increase their (audio). 

So, it's both a function of the income and the income growth. 

So, you might think of this, again, with the trade off as 

increasing each monthly payment, but likely reducing the total 

amount of loan forgiveness (inaudible). And potentially, not for 

Iris, but potentially, reducing the number of payment periods 

depending on income level. Now again, another I think pretty 

intuitive thing is about the protected income line. So, in this 

case, we did 150% of the poverty line. And if we were to go to 
Negotiated Rulemaking 10/8/2021

23

something like 175% or 200%, and I have a scenario on the next 

slide that shows this, that amount would go up, which means, 

would mean that discretionary income would decline, which means 

that the payment would also decline. Now, one thing that affects 

protected income is certainly, as I mentioned yesterday, HHS's 

poverty guidelines have gone up. Another input to consider is s 

inflation (inaudible). And so effectively, poverty guidelines 

are also going to increase as inflation increases(audio). So, we 

have higher inflation, all else equal, this would lead to a 

higher poverty guideline if that's taken into account. The other 

thing I want to point out here is that there was some discussion 

yesterday about whether or not expenses are really taken into 

account for debtors with different incomes. What I can say is we 

can probably all agree that the poverty line may not be sort of 

the best reflection of expenses, especially for different 

groups. However, that really, that income protection is what you 

might think about as sort of a measure of living expenses that 

is taken out. Right? So, so the IBR calculation certainly takes 

in that top line, monthly income, kind of protects an amount, in 

this case, 150% of the poverty line. And one of the reasons for 

protecting that amount is that there are expenses with living 

(inaudible). Again, I'm not making any judgment on whether 

that's the appropriate level or not of that income protection, 

but that's where we might think about expenses in this formula. 

The other thing that you might think about that matters here, is 
Negotiated Rulemaking 10/8/2021

24

actually the interest rate. Now, you might say to yourself, 

well, IBR does not actually take into account the interest rate. 

That is true, this formula does not take into account the 

interest rate. However, when we think about loan forgiveness, 

loan forgiveness is going to be a function of what they would 

have paid under a 20 year, under this period, if they didn't use 

this IBR plan, right, that's how we think about the loan 

forgiveness. So that amount, the forgiveness amount is going to 

depend on the interest rate for other purposes. And so, you 

know, one of the questions that's come up is how to think about 

income protection and income share, and thinking about maybe 

moving some of these levers in some ways. At least in the civil 

examples, again, for the example I'm putting out for Iris here, 

both of them are going to reduce the payment. And what I've 

shown you is, a similar-ish kind of repayment circumstance for 

Iris by changing, you know, her protected income or 

discretionary income. I want to do a little bit more work to 

kind of really map it out, as somebody said yesterday, about how 

to think about this, especially for more complicated situations, 

and actually common situations where somebody might go into 

nonrepayment for a period of time, just, you know, deferment, 

forbearance, that sort of thing. But, you know, in some ways, 

they're both protecting the amount that people will pay and 

reduce the amount that people pay per month. But they are, as I 

just mentioned, affected by different incomes, right? And so, 
Negotiated Rulemaking 10/8/2021

25

again, inflation being an example of something that is going to 

affect protected income, but wouldn't affect income share. So,

with that said, here are some kind of fictional borrower 

examples again, for Iris under some other assumptions. I'm 

trying to keep it pretty simple here. I'll mention here in a 

minute about some of the other work we're trying to do to inform 

the committee for the November session. But on the left here, 

what I've done here is to change income share in the middle 

panel. And so that takes it from 10% to 5%. As you can see here, 

all it's doing is taking that same discretionary income, right, 

so if you change the income share, you're not changing 

discretionary income per month, but you're taking a smaller 

portion of it to be paid out as a debt responsibility. If we go 

to the far-right panel there, this is with 200% of the poverty 

line income protection. So, in this case, you can see that the 

bottom line is actually quite similar to changing the 5% gain to 

a 5% income share in net, but the mechanisms for getting there 

are slightly different. And effectively, what this does is 

reduce the discretionary income, and keeps it at an income share 

of five, or of 10%, but their discretionary income is at a lower

base. And so, from that, you can see that the period one 

repayment is effectively the same, whether it's a 5% income 

share change or 200%. Now, where some differences might come in, 

is under this next slide where I add in a little bit more on the 

number of payments, the total amount that's forgiven, and the 
Negotiated Rulemaking 10/8/2021

26

number of interest-only payments of this borrower. Right, so 

what I just showed you was for a period one, how we might think 

about their monthly payment. However, with some reasonable 

inputs, we might think about total paid, total forgiven and 

interest-only payments under these scenarios as well. I just 

want to mention I kind of call these estimates--I was a little 

off in trying to match to the FSA loan simulator and trying to 

do some of these scenarios. I do want to mention this but I 

think this is ballpark, pretty close to what we would expect. 

So, if we think about those scenarios we just put up and I put 

up another one, at just 7.5% income share as well. If we move 

from left to right, again, the base case that I've already 

presented here in the far-left column, (inaudible) moved to the 

one to the right, this is taken out of 7.5% income share instead 

of 5% income share. What we see is the monthly payment declines, 

the total pay declines, but the total forgiven increases 

(inaudible), right? And again, you know, there are there are 

positives and negatives of this, again, especially (inaudible). 

The time period for Iris is also the same, and she does make a 

handful, 10 to 12 of interest-only payments. I know this came up 

as well, so I wanted to point this out that you know, if there 

is frustration that peoples’ balances are not declining, 

actually, some of this more generous protection, or income share 

or lower income share percentages are actually, under the 

current scenario, going to lead to more periods and cases 
Negotiated Rulemaking 10/8/2021

27

(inaudible), and you can see that if we move to the second 

column, okay? So here is what I just showed you, with the 5% 

income share, looking at the monthly payment, again, lower than 

under the base case. Total paid again, starts to be fine, total

forgiven increases (audio) period number 240 payments, but in 

this case, as you can see, Iris is making a large proportion of 

payments, which would be interest-only (inaudible) and, you 

know, the underlying data suggests that actually for the, you 

know, payments 201 to 240, the principal payments are actually 

quite small as well, which is why the loan forgiveness is, you 

know, effectively similar to the original balance. Now, I am 

again using some different assumptions than what's in the loan 

simulator, and so I want to stress that this isn't, you know, 

exactly what would happen, but from a close approximation. 

Similarly, if we go to the 200% poverty line income protection, 

keep income share at 10%, we have, again, a similar monthly 

payment to column two, a similar paid amount to a similar 

forgiven amount. Again, a large number of payments with the 

interest only. And again, what this would mean is that if a 

borrower would look at their balance, it would not be declining,

you know, for the first, you know, prominent number (inaudible).

One thing we can kind of point out here, too, is that I actually

had the slide, it was much busier. One, I wanted to save 

everybody's eyes a little bit. Two, as we start to get like 

higher poverty line protection, so I know some discussions like 
Negotiated Rulemaking 10/8/2021

28

250 or 400, or if we even took out an income share percentage 

lower, lower, what it effectively does is, it basically just 

drives the monthly payment down to only an interest only 

payment. The level of that would certainly matter, right? But 

effectively, the borrower would make interest-only payments, 

kind of below 5% income share here or above a 200% poverty line 

income protection, make interest only payments, that full amount 

would then be forgiven. The total amount would again depend on 

how we think about accruing interest and interest 

capitalization. And so, I do think that that's an important 

trade off to think about, given that some of the comments and 

considerations pointed out here. What I will say is, I know 

these are only kind of simplified examples, I thought they would 

be helpful to think about just to develop intuition for how you 

think about it. The (inaudible) help me kind of think about the 

simulation, and I've been talking with them. What we expect to 

do is hopefully produce kind of a report with a whole lot more 

scenarios, think about bigger household sizes, think about 

periods of interruption and other things. And the goal is really 

to be able to distribute that to all of you in advance of the 

next session so you have sort of a number of scenarios you can 

think through. Hopefully this is helpful in having you think 

about, again, intuition about the different levers and tradeoffs

a borrower might face under (inaudible). So that's all I have 

today. Do you have any questions for me? Or get back to 
Negotiated Rulemaking 10/8/2021

29

(inaudible)?

 MS. JEFFRIES: Okay, Raj, I don't see any 

hands at this point. So, thank you very much for that

presentation, and the information and data that, that you had to 

share. Michaela has a hand up.

 MS. MARTIN: Just super quick, do you have 

any preliminary numbers on the two household? Or like, is there 

a quick rule of thumb on what those payments might look like?

 MR. DAROLIA: Yes, so how we think about 

household size, all else equal, is that it increases the income 

percentage, right? So, so if we thought about Iris, let's see 

Iris was a household of two instead of one. What that I would 

change then is not her top line income level, it wouldn't change 

anything else. What it would change is the income protection 

because the poverty line income protection depends on household. 

So, I'm just pulling it up quickly here. For the monthly for a 

household of one, what I used was $1,610 at 150% poverty line, 

the protected income would be $2,178 as far as that income 

protection. So actually, that you know, it's not exactly but 

it's effectively similar, actually about 200% poverty line for 

one person if that makes sense. That's what you would expect 

for, all else equal, for a household of two, as opposed to a 

household of one, with that (inaudible).

 MS. MARTIN: Thank you.

 MS. JEFFRIES: Thank you. Bobby?
Negotiated Rulemaking 10/8/2021

30

 MR. AYALA: Raj, for all the scenarios you 

presented, these are all pre-tax, right? Pre-tax income? So 

discretionary income was also calculated pre-tax as well?

 MR. DAROLIA: That's, that's correct. Right. 

And so, so different programs use different ones. I believe, 

AGI, pre-tax AGI is using these calculations, and (inaudible).

 MS. JEFFRIES: Okay, seeing no other hands, 

let's move forward with our agenda and begin the discussion on 

questions seven, eight, and nine, provided the department some 

further information to work with moving forward.

 MS. HONG: So, I'm happy to read seven out 

loud. Raj, thank you so much for preparing those scenarios. I 

think you've given us a lot to chew on in terms of kind of 

understanding the different tradeoffs involved and just seeing 

them flushed out as you have it. We'll look forward to hearing 

more from you in November. So, thank you so much as we continue 

to kind of digest all of this. Question number seven. So that 

observers note that existing IDR plans may not be optimally 

designed to reduce delinquency and default, borrowers at the 

highest risk of delinquency and default are typically noncompleters, who owe low balances, yet who do not enroll in 

existing IDR plans at a high rate. So, what design factors and 

changes can better support borrowers at high risk of delinquency 

and default or otherwise encourage enrollment in IDR plans that 

match their financial circumstances and loan balances?
Negotiated Rulemaking 10/8/2021

31

 MR. SIEGEL: Sorry, can I go ahead then? Is 

that? Okay, sorry, to two reactions to this. The first is not 

actually in the IDR theory itself, but I actually have a 

question about the minimum monthly payment required on student 

loan payments. So rather than force students into an IDR, is 

there potential that low borrower, borrowers with low balances 

could have the same benefit of the $5 minimum payment outside of 

IDR. Under current status, the only way to get access to a $5 or 

$10 monthly payment, if your balance is low enough, is to 

actually come in through the IDR program. So, a suggestion 

unless it's statutory, of course, my suggestion would be to 

allow any borrower to have access to a lower, now I believe the 

current minimum outside of the IDR plan is $50. So, is there a 

capacity or a willingness to expand that access? Number two, I 

would argue in favor of reducing the 20-year rate based on the 

amount of the loan, so 20 years to forgiveness seems perhaps 

appropriate for balances of $50,000 or $60,000. But definitely 

not appropriate for a balance of $5,000 or $10,000. And is there 

a way for us to rethink the length of time to forgiveness, 

depending upon the, the balance involved? Thank you.

 MS. JEFFRIES: Thank you, Daniel. Persis?

 MS. YU: Thank you. So, I have a couple of 

thoughts about reducing delinquency. You know, one of one of the

things is that just recognizing that (inaudible) borrowers are 

first human beings and will fall behind and so this is one of 
Negotiated Rulemaking 10/8/2021

32

the reasons why my proposal about streamlining the process to 

get out of default and back into income varying payment and 

counting payments, I think is so critically important. But on 

top of that, I think that there are meaningful ways in which we 

need to make the program work better. I believe that we should 

you know, Bethany's not here, so I will pick up on her thoughts

and say that you know, that we need to get borrowers who, 

especially borrowers who are demonstrating some sort of 

financial distress, we have previously called for the Department 

to automatically place any borrowers who are delinquent on their 

loans by some period of time in, into income varying payments. 

You know, I agree 100% with Daniel that, like, to cancel it, the 

cancellation period needs to be modulated by (inaudible). I'm 

not convinced that the balance size is necessarily the right way 

to do that. But I do think that we do need to look at, at that, 

because a lot of the clients that I work with, frankly, they go 

into default, because they don't turn in, because the paperwork 

is just too burdensome. And having them go through that burden 

for 20 years just doesn't make sense when they have $0 payments. 

So, we need to modulate somehow the repayment period based upon 

the realities of the circumstances that the borrowers are 

facing. And I will also echo the call, I don't know if this is 

the appropriate time to raise the question, but the other 

repayment plans I think are also really important. You know, as 

we noted yesterday, some, for some folks, income varying payment 
Negotiated Rulemaking 10/8/2021

33

is actually not affordable, and so there needs to be a way to 

look at the other payment plans as affordable options and not 

hold it against borrowers when it comes to cancellation. I 

particularly would like to draw your attention to the 

alternative repayment plan, where the Secretary has the 

authority to, under some circumstances to utilize the borrower's 

expenses, and, and income to figure out what an affordable 

payment amount would be. And I think that that is a program that 

has been largely underutilized by the department and servicers 

and so I hope that we come up with a generous payment, payment 

plan that will cover as many people as possible, but that we 

also explore for other folks for whom that does not work, his 

other option, ensure that we always maintain some affordable 

option for borrowers, regardless of the other expenses, or 

issues that arise in their life. So, thank you.

 MS. JEFFRIES: Thank you, Persis. Marjorie?

 DR. DORIME-WILLIAMS: Yes, so Persis beat me

to the punch, but I was certainly going to (inaudible) again, 

and the need for automation of a lot of these processes. And 

specifically thinking about, at least borrows for who we have 

information for, currently, you know, you can link to your IRS 

information. And so, if the department can think about being a 

little bit more proactive, and looking at information between 

income, loan balance, history of payments made and the amount 

made, so we know that borrowers who are experiencing financial 
Negotiated Rulemaking 10/8/2021

34

difficulty may not make full payments and sort of pay as they 

can. And so, I think if we can look at sort of the history of 

borrowers to create a system that then proactively kicks in to 

make a recommendation about IDR, or maybe even automating it and 

automating that enrollment process. And then borrowers can 

choose to opt out if they, you know, make the decision that, 

that they may not fit for them. I also want to thank Raj for 

that information and showing those differences based on income 

and how much we're protecting discretionary spending. And so, I 

would certainly advocate for using a higher threshold for at 

least being able to lower those monthly payments, while also 

understanding that it does increase the interest and I would 

second Daniel's point about, for individuals who are already in 

these plans, we know that they're facing financial difficulty. 

So then to add, you know, this interest or not have a cap on 

interest, which then they'll be held liable for after you know, 

the loans are forgiven, seems to defeat the purpose. So, I think 

if we look at a combination of some of the questions that we've 

answered previously or addressed previously, in addition to 

automating this process, I think that would go a long way 

towards making this much easier for borrowers, particularly if 

we already know, you know, folks who are marginalized, low 

income, borrowers of color, we know that these are struggles for 

them. So, it doesn't seem to make sense to wait until their 

accounts are delinquent to then try to fix the problem.
Negotiated Rulemaking 10/8/2021

35

 MS. JEFFRIES: Thank you, Marjorie. 

 MS. MARTIN: Can I allow Bobby to go ahead of 

me?

 MS. JEFFRIES: I'm sorry?

 MS. MARTIN: Can I allow Bobby who's behind 

me to go ahead of me? Thank you.

 MS. JEFFRIES: Sure, Bobby?

 MR. AYALA: Thank you. I kind of want to echo

what, what has been said. And Marjorie kind of touched on this 

but when we take a look at the issue of non-completers and we 

dive into the research that it affects their completion and 

persistence, when we look at it through the lens of two year 

colleges, what we have are high numbers of low income, 

marginalized students, first generation students, there are 

definitely social capital issues that they won't have to 

navigate at higher ed, much less the ability to navigate the 

loan repayment options. And when we look at the things, the 

issues that affect their persistence, you know, it's usually 

having to do with familial obligations, especially for those 

first-generation students. Life happens, you know, they end up 

having to work. And those particular issues prevent them from 

even being able to afford any type of payments when it comes to 

repaying their loans, which is why they're probably higher, at 

higher risk of being delinquency or default. So, to echo what 

everybody had said, automation would be a critically important 
Negotiated Rulemaking 10/8/2021

36

or contributing factor to helping them through this process. And 

also wanted to take this time to note that the alternate for 

two-year colleges is also going to want to speak so I'm gonna 

turn my camera off while she comes on. Thank you.

 MS. JEFFRIES: Thank you, Bobby. Michaela, 

are you ready?

 MS. MARTIN: Yes, my son needed the 

(inaudible), I'm sorry.

 MS. JEFFRIES: No worries, no worries.

 MS. MARTIN: Was the question about minimum 

payments because you cannot be on an IDR if you have a zero 

payment, is that where that was? What that meant? Like, I guess 

the question would be can you be on an IDR if you have a zero 

payment? Persis is nodding yes. Awesome. So then, like, with the 

counting of like, years, does that restart every time they go 

into default?

 MS. JEFFRIES: I'm not seeing any answer for 

that. If not, well, can you drop that in the chat Michaela?

 MS. MARTIN: Yeah, I guess my concern is that 

without like, because you have to re-enroll every year, I have 

to re-enroll even though it's like paused because I had a break 

between undergrad and grad, at least it prompts me to every 

year. And like, if you didn't re-enroll, even though you had a 

zero payment, then you'd go into default. And then you'd have 

to, if you got back on it, have to restart that 20 years, and so 
Negotiated Rulemaking 10/8/2021

37

I know that it's already been said, but considering those needs 

for automation, having those just automatic, like if your taxes 

show, or you've just chronically had a zero payment to just keep 

you on that payment plan so that it's not a forever thing, I 

think is really important.

 MS. JEFFRIES: Thank you, Michaela. Jeri?

 MS. O'BRYAN-LOSEE: Sorry, it's Friday, I 

couldn't find the unmute button. And this kind of goes along 

with I mean, I think we have a lot of people that understand, or 

really would appreciate automation. Because you know, it's going 

to fall into the communication piece. Because you know, when 

you're talking about students, like Bobby said, who are not able 

to complete because of other obligations, or because they can't 

afford it anymore, or whatever, they are also people who are not 

going to be easily communicated with. So, they may not have 

access to technology, they may not have access, you know, to 

what they need to keep up. So, if it was automated, that would 

help that will help for them when they do try to re-enroll again 

in the future or things level out or whatever. That way, you're 

not penalizing, you know, extra penalization on people, if 

that's a word. So, thank you.

 MS. JEFFRIES: Thank you, Jeri. I see three 

more hands. Joe, John, and Christina. After that, I would like 

to move on to question number eight. We are approaching the 

lunch hour. It is our hope that you can get through this issue 
Negotiated Rulemaking 10/8/2021

38

paper before lunch. Thank you. Joe?

 MR. SANDERS: Hi, yeah, I'll just go ahead 

and make my comments on eight as well so that we save time here. 

So, a couple things. On the automation point, Bethany had 

previously raised that there are some people that don't have IRS 

data. I was, you know, we've done some work around unemployment 

data. Unemployment, they tend to house a lot of income 

information because if somebody is getting a paycheck, then they 

have to pay unemployment tax and so they have data for people 

that maybe there's not IRS data for. So don't know if the 

department had looked at that or not. That's another data set 

that may be useful. To the extent that, you know, so, and on the 

automation point, if someone is, becomes a certain amount 

delinquent, you know, I would ask that (inaudible) considered 

automatically putting them into an income driven payment plan. 

That is probably the lowest touch way to get them in. Second, 

Jerri's point about people being difficult to communicate with. 

Third point, if automation doesn't work for some reason, I would 

suggest looking at service or requirements for outreach once 

somebody does reach a certain level of delinquency. Again, the 

Rhode Island Student Loan Authority's experience here may be 

useful. They, their process was they looked at what they were 

paying their debt collectors, they said it was too much. And 

they were not getting a good return on the loans when they did 

go into debt collection. So, they renegotiated those contracts 
Negotiated Rulemaking 10/8/2021

39

with the debt collectors. They extended the amount of time 

before they sent anything to the debt collector, they brought 

servicing in house. And then when a borrower hits a certain date 

of delinquency, they start proactive outreach calls. And one of 

the things that they're addressing the borrower at that time is 

whether the income driven plan is the appropriate plan. So,

can't automate? Look at when servicers are outreaching and what 

are they asking borrowers? Are they just saying pay me? Are they 

saying, hey, you should look at IDR? Last point. And this goes 

to eight, that ties in with what I just said. If you're going to 

have servicers doing outreach to people on income driven 

repayment plans, it would help the borrower and it would make it 

more logistically possible for the service or if the plans were 

simpler, if there weren't 16 plans. If there's one option, and -

- 

 MR. TOTONCHI: Ten seconds left, I guess, 30 

seconds, you have 10 seconds. 

 MR. SANDERS: Sorry. And they could say here, 

here's one plan, click the button. You're in.

 MS. JEFFRIES: Thank you, Joe. John? 

 MR. WHITELAW: Yes, thank you. Very briefly, 

automation, automation, automation. I will also echo Bethany. I

do think, I also want to put this in context for some of the 

lowest income folks who are having difficulties. And I know and

I appreciate that 150% is low, there are people whose incomes 
Negotiated Rulemaking 10/8/2021

40

are far lower than that, who are having their incomes attached 

by the Department for Delinquent Debts, you couldn't have an 

income of $1,600 a month in Social Security, that is your only 

income, you could be losing $240 of that to attachment. And so,

I think that for those folks, it's particularly important to 

develop mechanisms to find them and get them into a zero 

payment, such that they are not undergoing extreme hardship. And 

I do think there are databases that the department can 

investigate doing sharing with, for example, snap, formerly 

known as food stamps, is a nat -- nationally run program for 

low-income families. I think it would be probably fair to say 

that if you know anyone, if someone in the family is getting 

SNAP benefits, you can pretty much assume that they are 

extremely impoverished. And so, I think there are creative ways 

where the department can go in to do data sharing with different 

federal agencies to get information that will allow them to 

automate this and I cannot say this enough for people with 

disabilities, for people who are economically challenged. Yeah, 

if you don't have automation, lots and lots of eligible people 

are just going to fall between the cracks. I think the 

department has come to recognize that in many ways, especially 

with their experience on the social security side where lots of 

people who are eligible just couldn't manage the application 

process. And to the extent that we can get folks who are clearly 

eligible into programs that, that save them economically, 
Negotiated Rulemaking 10/8/2021

41

automation is, I don't think there's any question that's the 

way, I think the department is hearing that from pretty much 

everybody in this negotiation. Thank you.

 MS. JEFFRIES: Thank you, John. Christina, 

and, okay, Christina.

 MR. SANDERS: Yes, good morning, I wanted to 

speak directly to the issue of borrowers who are at high risk of

delinquency who are very likely to be low balance borrowers and 

those who do not complete their degree or program. This, this 

speaks directly to the community college population and has a 

great deal of impact because stopping out and is, is a typical 

pattern of experience for community college students who have 

multiple life roles and oftentimes have to press pause on their 

education, to attend to the, to their other competing priorities

in their life. So, I want to see what we can do for that 

population and other borrowers to incentivize program completion

and completion of educational goal. And, and what happens when a

student is in default is that they do lose their Pell Grant 

eligibility. And is it possible to unhitch that Pell restriction

for borrowers and default or somehow incentivize them or provide

a pathway for them to complete their education? Which, of 

course, as we, as we know, can set them on the road to social 

mobility, hiring, income, etc. And so, I'm concerned about that.

And in any time, you can reduce complexity, and provide multiple

pathways for, for our population. It is, is almost always in 
Negotiated Rulemaking 10/8/2021

42

their best interest, in the event, so, and so I would support 

automation, in that respect. And, and also, of course, when 

we're talking about community college students, we're also 

talking about the most diverse population of students. So,

there's the, the implicit social justice issues involved in, in 

providing relief and multiple pathways to, to exit default and 

to, and to provide the one less barrier to program completion 

and educational goals. Thank you.

 MS. JEFFRIES: Thank you. I see two hands. 

Now, Rachelle and Michaela, I want to make everyone aware it is 

11:51 A.M. Rachel will be stepping in to speak on behalf of 

four-year institutions.

 MS. FELDMAN: Thank you, Cindy. I want to 

speak again to the confusion of having so many IDR plans I, I 

applaud the, all the thoughts around automation and hope that 

the department will be able to take advantage of recent 

legislation that allows more data sharing to greatly increase 

the automation of many processes, but especially the reenrollment that we know borrowers miss. I also applaud how the 

department has been able to use their emergency powers during 

the COVID crisis to help borrowers through the payment pause. 

And I would like to encourage them to think about whether they 

could take the executive action to move existing borrowers into 

fewer IDR plans coming out of the payment pause. Perhaps into 

one, perhaps into a limited number of those rather than starting 
Negotiated Rulemaking 10/8/2021

43

us again at nine, sixteen, however many different plans plus 

whatever plan we come up with now, I just want to make a real 

plea to have fewer pathways so that it will be less confusing 

for everyone, not just our PSLF borrowers but our borrowers at 

every level. Thank you.

 MS. JEFFRIES: Thank you, Rachelle. Michaela?

 MS. MARTIN: Yeah, this is insanely 

complicated. And every time I feel like I start to understand, 

it's like, oof, right, so if you don't re-enroll, then you can't 

just automatically go in an IDR. I just was on Persis' website 

and that's the, our advisors who have been super helpful in 

asking me questions. Then you have to either consolidate, but if 

you've already done that, you can't do that, then you have to 

make nine payments, to be able, nine payments to be able to 

qualify for a zero payment if you fall within that. And that is 

just another thing that I just really want to highlight, seems 

like counterintuitive to go through two different programs to be 

able to qualify for a zero payment because you can't afford, but 

you can't afford the payments to be able to afford not having a 

payment. Like I can't, I can't even explain that in a way that 

seems linear at all. So just a consideration when you're 

drafting those.

 MS. JEFFRIES: Thank you Michaela. Persis?

 MS. YU: So, I 100% agree that the system is

just not navigable by the average borrower at this point. And I
Negotiated Rulemaking 10/8/2021

44

think that one of the things we need to work towards is making 

this easier for borrowers. So, I'd like to emphasize, I prefer 

the talking about ease, rather than simplicity, because I think 

it's partially about the programs, but it's also about the 

implementation of the programs. And it's the servicers who are, 

who are being paid to walk borrowers through the programs and 

making sure that they are doing so in a way that is actually 

adequately discussed, you know, taking into consideration 

borrowers’ circumstances. I think the plans are understandable 

by professionals who are then hired to help borrowers navigate 

the system. And one of the reasons why I resist the call, I 

mean, I guess what's important, more important to me is that we 

keep protections than we only have one plan. So, for example, 

there's currently only one plan that Parent Plus borrowers are 

able to consolidate and get into. And we have to be able to have 

an option for Parent Plus borrowers. Similarly, you know, there 

are some plans that are based upon if you're married, require 

both spouses’ income, regardless of tax filing status, whereas 

other plans don't. And, you know, there has to be an outlet. 

This is a, this came up re: repayment and negotiated rulemaking, 

there has to be an outlet for borrowers to not include their 

spouse’s income. This is an important issue in the domestic 

violence community. For a lot of low-income folks who, whose 

spouses may not be reliant, have reliable sources of income, 

it's very important for folks to be able to have that outlet in 
Negotiated Rulemaking 10/8/2021

45

order to separate their income. And so, I think one of the 

reasons why we have so many plans is because they offer 

different things. And so, what I want, so I would love for us to 

have one plan that does all the things, but we need to make sure 

that the thing that is more important is keeping the protections 

for borrowers, than, than reducing the number of plans. So, I 

would like to, as to hold both of those ideas, and then realize 

that we have people who are paying lots of money to walk 

borrowers through and hold them accountable for making sure that 

they are doing so adequately.

 MS. JEFFRIES: Thanks, Persis. Dixie?

 MS. SAMANIEGO: Yeah, I really want to echo 

Michaela's point. I don't know if anyone has noticed, I am 

having trouble understanding everything. And while I appreciate 

all the information, it's information overload for me. And so,

it's just so confusing. And I just know that so many students, 

especially like students (inaudible) last year, trying to figure

it out, right? I even talked to my advisor, and she was like, 

yeah, my senior year of college, my last year of college, you 

know, my advisor in student government was like, hey, you need 

to figure this out, you need to get on a phone call, you figure 

it out. And she was like, I literally put my entire life, into 

trust with someone on the phone, to figure out a plan for me. 

And she was like, and we all know how that ended out. And she 

stopped paying for like the next 15 years, large amounts of 
Negotiated Rulemaking 10/8/2021

46

money. And so, for me, I'm trying to understand everything, and 

trying to figure it out while I'm here. And so, if I can't 

figure it out, and I'm here at the table, trying to advocate for 

other folks, folks who aren't here and actually have to enroll 

in this plan, I don't understand it either. And so, I feel like, 

there's just so much frustration that I'm feeling. But I think 

the question that I have, at least for the Department of 

Education is, are there any talks at the very least, or plans 

for automation -- like making this just easier? Like, besides 

this language, right? Are there talks that happened before this? 

Because this isn't even like this rule is not going to come out 

until a year later. And so, by that point, you're missing

millions of people having to make hundreds of payments within 

that time frame. And so, I would just like some, I guess, 

reassurance that the Department of Education is doing something 

in the meantime, that I don't know, it's just frustrating. But I 

would like some reassurance that at least the Department of 

Education, is doing their job and trying to fix this and not 

just relying solely on this conversation here. Because this rule 

is not going to come out until a year later. And that's just, 

it's not timely enough, obviously. So, I'd like some reassurance 

at least.

 MS. JEFFRIES: I think Brian may have a 

response for you.

 MR. SIEGEL: Yeah, and just, the department
Negotiated Rulemaking 10/8/2021

47

is working closely with the IRS to implement a law passed by 

Congress to allow us more access to IRS data, and to allow us to 

use it for more purposes. When people talk about automating 

things, it is important to remember, we can't just say we want x 

data from you, from the agency that has it. The agency, whether 

it's federal or state, collects it for a certain reason, and is 

limited by law to generally use it for those reasons. That's in 

order to protect privacy of people who use those programs. 

Similarly, we can't just say, well, we're going to share our 

data with, with other agencies for the same reason. Plus, in 

situations like unemployment or certain income support programs, 

that data is maintained on the state level and is totally under 

state control and it would be exceedingly difficult for us to 

have legal authority to access that information and to use it 

for our purposes. That may be something that Congress would want 

to take up more broadly the next time they look at our programs. 

But there's, the department can't go out and get the data and 

use it for our purposes without statutory changes. As I said, we 

are working closely with IRS and hope to make more, more 

movement in getting that process up and running as soon as we 

can. It's been complicated because of complicated systems and 

complicated issues, including privacy issues for the borrowers. 

But we are moving and hope to have that done soon.

 MS. JEFFRIES: Thank you, Brian. There are a 

couple of questions that went into the chat, that you might want
Negotiated Rulemaking 10/8/2021

48

to take a look at. It is 12:01 P.M. in your scheduled lunch 

break. So, the plan will be to resume here at one o'clock 

promptly. And we will pick up with question number eight and 

nine. Josh, you had a question?

 MR. ROVENGER: Yeah, thanks, and I'll be 

quick, I appreciate, appreciate everyone's patience. I just have 

a proposal with respect to the agenda for the afternoon. So 

false certification and issue number 11 is deeply important to 

my client base. And so, this proposal isn't to suggest 

otherwise. But the issues and the population implicated in issue 

12 is often one that's left to the end of discussions like 

these, if discussed at all. And so given that, given that the 

existence of the subcommittee may also speed the conversation up 

a little bit, I would propose swapping issue 11 and 12 in our 

discussion, so that everyone can be fully heard without feeling 

rushed on issue 12.

 MR. SANDERS: Thank you for that Josh. 

According to the protocols and facilitators do set the agenda in 

consultation with the members. So, at this point, I think what 

I'd like to do is to see by consensus where the committee lies 

on this, and then we can pick back up after lunch, okay? So, by 

quick thumbs, could I see your vote or your, yeah, your thumbs 

on swapping these agenda items, recognizing you do need to get 

through all of them?

 MS. MARTIN: I'd like to note that this is 
Negotiated Rulemaking 10/8/2021

49

the first full consensus we've ever had.

 MS. JEFFRIES: I know, I don't see any 

objections. So, the FMCS team will address that when we come 

back from lunch. It is 12:03, we will see you promptly at 1 P.M.

 
Negotiated Rulemaking 10/8/2021

50

Appendix

Department of Education, Office of Postsecondary Education 

Zoom Chat Transcript 

Affordability and Student Loans Committee - Session 1, Day 5, 

Morning, October 8, 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 Heather - PSLF Advisor to Everyone: 

Good morning 

From Marjorie (P), 4 Yr. Public Institutions 

(she/her) to Everyone: 

Good morning and happy Friday! 

From John Whitelaw (A-Disability) (he/his) to Everyone: 

John is in for Bethany today (Disability) 

From Jessica Barry to Everyone: 

Good morning! 

From Christina (A) 2-Year Public she/her to Everyone: 

good morning! 

From Noelia, Minority Serving Inst. (A) to Everyone: 

Good morning! 
Negotiated Rulemaking 10/8/2021

51

From Alyssa (A) Fin Aid Administrators to Everyone: 

I'll be in for Daniel until he gets here today. 

From Brady - FMCS to Everyone: 

broberts@fmcs.gov 

From Dr. McTier (P) Priv. & Non-Profit to Everyone: 

I will be subbing in for Misty for today representing the 

Priv. & Non-Profit 

From Jaye FFEL agencies P to Everyone: 

Data Request: Can the department please provide the 

potential/pending non-ED owned FFEL volume of BD 

discharges? Thank you. 

From Brady - FMCS to Everyone: 

Don't forget about naming conventions! 

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

I'm seeing a lot of frozen faces is that just me? 

From Will (A) FFEL Agencies/Lenders to Everyone: 

am fine here 

From Jaye FFEL agencies P to Everyone: 

Yes to including Will Shaffner. 

From Joe (P); State AGs to Everyone: 

I'd like my alternate in my room. 

Mediators -- FYI, I am ready to present information to 

inform the IDR discussion, including some preliminary 

illustrative scenarios on IDR changes in questions 1, 2, 

and 3, whenever the time is appropriate 

From Raj - Advisor Econ/Higher Ed/Data to Everyone: 
Negotiated Rulemaking 10/8/2021

52

From Dixie (P) Dependent Students (ella/she) to Everyone: 

bio breaks pleaseeee HAHA 

From Jennifer - ED negotiator to Everyone: 

https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202

104&RIN=1894-AA12 

From Daniel Barkowitz to Everyone: 

For general interest, adding a research study on the impact 

of rehabilitation of defaulted loan on students' academic 

success. https://www.acct.org/files/ACCT8152%20%28Fault%20

Lines%20in%20Borrowing%29v3.pdf FAULT LINES IN BORROWING: 

ACADEMIC OUTCOMES OF STUDENTS IN DEFAULT 

From Daniel Barkowitz to Everyone: 

Studied at Valencia College/ 

From Daniel Barkowitz to Everyone: 

In this example, was the inflation assumption applied to 

the poverty line? 

From Daniel Barkowitz to Everyone: 

Thank you! Question answered. 

From Heather - PSLF Advisor to Everyone: 

And to reiterate, the amount forgiven matters to borrowers 

insofar as it may be taxed as income 

From Daniel Barkowitz to Everyone: 

To reiterate, the interest only and impact on forgiveness 

amount and taxability of forgiven loan balance is the 

reason I advocate strongly for a reduction of interest rate 

to 0% during IBR, especially for students who might have a 

poverty line income protection of 300% or lower. 

From Daniel Barkowitz to Everyone: 
Negotiated Rulemaking 10/8/2021

53

*remove the word protection. 

From Suzanne (state regulators) (A) to Everyone: 

It would be helpful to see these calculations assuming no 

interest capitalization, to see how those pieces fit 

together... 

From Heather - PSLF Advisor to Everyone: 

And note that family size is not linked to IRS exemptions, 

but to the definition of family under H&HS 

From David (P) - State hi ed agencies to Everyone: 

Thanks to the Department for having the advisors. Super 

helpful. 

From David (P) - State hi ed agencies to Everyone: 

+1 to Persis 

From Jennifer she/ella, (A) Student Loan 

Borrowers to Everyone: 

+1 Bobby 

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

You can have a $0 payment 

From Heather - PSLF Advisor to Everyone: 

yes 

From Michaela Martin to Everyone: 

oh so you definitely default 

From Michaela Martin to Everyone: 

Sorry that was meant to be private 

From Will (A) FFEL Agencies/Lenders to Everyone:
Negotiated Rulemaking 10/8/2021

54

+ Joe with simpler plans 

From Marjorie (P), 4 Yr. Public Institutions 

(she/her) to Everyone: 

+1 Joe 

From Rachelle (A) 4 year public to Everyone: 

+2000 Simpler and fewer plans. 

From Marjorie (P), 4 Yr. Public Institutions 

(she/her) to Everyone: 

Rachelle will be speaking. 

From Bobby (P) Two Year Public Colleges to Everyone: 

+1 Christina unhitch pell! 

From David (P) - State hi ed agencies to Everyone: 

+1 on separating default and Pell eligibility 

From David (P) - State hi ed agencies to Everyone: 

Is default and Pell eligibility in statute? 

From Joe (P); State AGs to Everyone: 

Eric, the state AG alternate, will be taking over for our 

constituency over lunch. 

From Daniel Barkowitz to Everyone: 

+10000000 to Rachelle 

From Joe (P); State AGs to Everyone: 

after lunch, not over lunch 

We can switch back Marjorie 

From Rachelle (A) 4 year public to Everyone: 
Negotiated Rulemaking 10/8/2021

55

From Jeri (P) (she/her), Student Loan Borrowers, 

Primary to Everyone: 

+1 

From Rachelle (A) 4 year public to Everyone: 

And the complexity helps bad actors take advantage of 

struggling borrowers 

From Jeri (P) (she/her), Student Loan Borrowers, 

Primary to Everyone: 

+1 Persis 

From Bobby (P) Two Year Public Colleges to Everyone: 

+1 Persis separate marriage income 

From Marjorie (P), 4 Yr. Public Institutions 

(she/her) to Everyone: 

+1 Persis 

From Joe (P); State AGs to Everyone: 

Agree with Persis that borrowers benefits should not be 

sacrificed for the sake of simplicity. Servicers need to do 

a better job advising borrowers. 

From Jennifer she/ella, (A) Student Loan 

Borrowers to Everyone: 

+1 Persis 

From Daniel Barkowitz to Everyone: 

+1 Persis on separate income consideration,. especially as 

it impacts PSLF ongoing. Unfortunate that a spouse who 

works in public service would be held from having loans 

canceled (other than the waiver) due to repayment plan. 

From Joe (P); State AGs to Everyone: 
Negotiated Rulemaking 10/8/2021

56

Brian, will you drop a cite in the chat for the IRS data 

sharing law?

From Rachelle (A) 4 year public to Everyone:

Did FUTURE not make those statutory changes?

From Joe (P); State AGs to Everyone:

States would be willing to discuss data sharing if it would 

help the Department on this issue

From Raj - Advisor Econ/Higher Ed/Data to Everyone:

Just to highlight that a cost of simplicity in the number 

or complexity of program design is often that it makes it 

harder to take into account unique and specific needs of 

some individuals and families. Not opining on whether 

simplification is needed here, but there is sometimes a 

tradeoff

From David (P) - State hi ed agencies to Everyone:

+1 to Joe's comment. SHEEO would be happy to help.

From Brian.Siegel to Everyone:

We were asked for a citation to the restrictions on the use 

of IRS information. Those are in 26 USC 6103.