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From: Kyra Taylor, Primary Negotiator on Behalf of Legal Assistance Organizations That 

Represent Students or Borrowers; Jessica Ranucci, Primary Negotiator on Behalf of 

Consumer Advocates; John Whitelaw, Primary Negotiator on Behalf of Individuals with 

Disabilities or Groups Representing Them

To: Student Loan Relief Negotiation Committee

Date: November 14, 2023 

Re: Relief For Distressed Borrowers Using Existing Authority

 

As the legal assistance organizations’ primary negotiator raised during the first two 

negotiation sessions, the Department currently has the authority to provide relief to distressed 

borrowers using its compromise authority under the Federal Claims Collection Standards 

(FCCS). At a minimum, the Department could fully compromise the below groups of borrowers’ 

debts under the FCCS basis that the Department is “unable to collect the debt in full within a 

reasonable time by enforced collection proceedings.” Under the FCCS, the Department has the 

discretion to differentiate what constitutes a “reasonable amount of time” for different borrowers 

based on the circumstances they present and the data the Department has in its possession. The 

Department could use the borrower’s time in repayment, default, FAFSA data, payment history, 

or potential eligibility for $0 payments or cancellation under an IDR plan to determine when a 

reasonable amount of time to collect the borrower’s debts in full has been exceeded.1 

We strongly recommend that, at a minimum, the Department use either its authority 

under the FCCS to cancel these debts now, or include language within its new regulations to 

fully discharge the debts of the following borrowers. 

A) The borrower’s debt was in default before the payment pause took effect in 2020 

and 

(1) The Department either 

(i) Garnished the borrower’s wages pursuant to 34 CFR Part 34 or 

has used administrative offset to offset federal benefits pursuant 

to 34 CFR Part 30, Subpart C for a year or more and the 

payments have not exceeded the amount of interest and 

collection fees charged to the borrower during that time frame

(ii) Offset the borrower’s IRS tax refunds pursuant to 34 CFR § 

30.33 for a year or more and the payments have not exceeded 

the amount of interest and collection fees charged to the 

borrower during that time frame.

(2) The borrower’s loans entered default 3 or more years prior to the 

payment pause in 2020; 

(3) The borrower has been in receipt of means-tested state or federal public 

1 For data indicating that these populations of borrowers may never repay their debts in full within a reasonable 

period of time, see Abby Shafroth & Kyra Taylor, Delivering Distress to Borrowers in Default, National Consumer 

Law Center (October 2023).
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benefits for 3 years or more during the time his or her loans have been 

in repayment. 

(4) The borrower owes Parent PLUS loans and the child that received the 

loans had an Estimated Family Contribution (EFC) of $0 on their 

FAFSA application; 

(5) The borrower is currently over the age of 62 and their income is 

primarily based on Social Security or is less than 225% of the federal 

poverty line;

(6) The borrower has been eligible for a $0 monthly payment amount for 3 

years or more on in an income-contingent repayment plan, incomebased repayment plan, income-sensitive repayment plan, or alternative 

plan provided in 34 CFR §§ 685.208, 685.209, 685.221, 682.209, or 

682.215; 

(7) The borrower’s loans entered payment: 

i. 10 years ago for borrowers with an original principal balance 

of $12,000 or less, plus one year for every additional $1,000 

borrowed up to 20 years for borrowers that only borrowed 

undergraduate loans or 25 years for borrowers who 

borrowed one or more graduate loan, 

ii. 20 years ago for borrowers with an original principal balance 

of $22,000 or more for only undergraduate loans, or 

iii. 25 years ago for borrowers with an original principal balance 

of $27,000 or more for loans that include graduate loans; or 

(8) The borrower filed for bankruptcy after the borrower’s loans were 

disbursed. 

B) The borrower has debts that were in repayment before the payment pause 

began and 

(1) The borrower is over the age of 62 and their income is primarily 

based on Social Security or has income that is less than 225% of the 

federal poverty line; 

(2) The borrower has been in receipt of means-tested state or federal 

public benefits for 3 years or more during the time his or her loans 

have been in repayment; 

(3) The borrower has been eligible for a $0 monthly payment amount 

for 3 years or more on in an income-contingent repayment plan, 

income-based repayment plan, income-sensitive repayment plan, or 

alternative plan provided in 34 CFR §§ 685.208, 685.209, 685.221, 

682.209, or 682.215; 

(4) For 10 years or more, the borrower has been in forbearance, 

deferment, delinquency, default, or has been eligible for an incomecontingent repayment plan, income-based repayment plan, incomesensitive repayment plan, or alternative plan provided in 34 CFR §§ 

685.208, 685.221, 682.209, or 682.215 where payments have not 

been applied to the borrower’s original principal; or

(5) The borrower filed for bankruptcy within the prior 7 years and after 
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the borrower’s loans were disbursed.