From: Yael Shavit, Primary Negotiator Representing State Attorneys General; Kyra Taylor, 

Primary Negotiator Representing Legal Assistance Organizations that Represent Students 

 or Borrowers; Jessica Ranucci, Primary Negotiator for Consumer Advocates; John 

Whitelaw, Primary Negotiator for Individuals with Disabilities or Groups Representing 

 Them; and Lane Thompson, Primary Negotiator for State Officials

To: U.S. Department of Education 

Re: Proposed revision to 34 C.F.R. § 30.80(d)-(e) regarding servicer errors

Date: November 14, 2023 

For more than a decade, borrowers, State Attorneys General, consumer protection 

officials, and advocates have documented widespread mismanagement and abuse by student loan 

servicers and private collection agencies hired by the Department to administer the student loan 

system.1 As has been made clear by recent federal and state actions against student loan 

servicers, servicing abuses do not just cause immediate financial harm to borrowers, they also 

undermine borrowers’ rights to debt cancellation under the Higher Education Act. As a result, we 

ask that the Department codify that it may use its waiver authority to provide relief to borrowers 

whose ability to access loan relief has been compromised due to servicing misconduct.2 

Our proposed regulatory language below is consistent with borrowers’ bill of rights laws 

that have been passed by 19 states.3 

Proposed Regulatory Text: 

§ 30.80 Waiver of Federal student loan debts. 

[....] 

1 See Broken Promises, the Untold Failures of ACS Servicing, Student Borrower Protection Center (Oct. 

2020); Rewriting the TEACH Grant Rules: Lessons From A History of Mismanagement, Public Citizen 

(Dec. 2018); Cory Turner, How the most affordable student loan program failed low-income borrowers, 

NPR (April 1, 2022); Consumer Fin. Prot. Bureau v. Navient Corp., 2017 WL 3380530 (M.D. Pa. Aug. 

4, 2017); People v. Navient Corp., No. 17CH761 (Ill. Cir. Ct. Cook Cty. Jan. 18, 2017); People v. Navient 

Corp., No. CGC-18-567732 (Cal. Super. Ct. Nov. 1, 2018); Mississippi v. Navient Corp, No. 25CH1:18-

CV-00982 (Miss. Ch. Ct. Hinds Cty. July 17, 2018); Pennsylvania v. Navient Corp., No. 3:17-cv-1814 

(M.D. Pa. Jan. 12, 2022); Commonwealth v. Pa. Higher Educ. Assistance Agency, 34 Mass. L. Rptr. 616 

(Mass. Super. Ct. Mar. 1, 2018); Berman v. Pa. Higher Educ. Assistance Agency, 2022 WL 767530 

(M.D.N.C. Mar. 14, 2022).

2 On November 7th, the Department of Education released a new framework for servicer 

accountability that was narrowly focused on FSA’s role as administrator of servicing contracts. 

Our proposal builds on and complements this framework.

3 Specifically, this regulatory language reflects laws passed in California (Ca. Civ. Code. 

1788.103(c)), Virginia (Code of Va. § 6.2-2619), and Nevada (added by 2023, Ch. 466,§47, eff. 

1/1/2024). 
(d) Forgiveness based upon repayment plan. (1) The Secretary may waive the outstanding 

balance of a loan where the Secretary determines that a borrower is not enrolled in, but otherwise 

meets the eligibility requirements apart from recertification requirements for forgiveness under— 

(i) An income-based repayment plan under § 682.215 or § 685.221; 

(ii) An income-contingent repayment plan under § 685.209; or 

(iii) An alternative repayment plan under § 685.208(l). 

(2) The Secretary may waive up to the outstanding balance of a loan pursuant to 

paragraph (1) upon a determination by the Secretary that: 

(i) an entity awarded a contract by the Secretary under 20 U.S.C. 1087f, or any 

servicer or guaranty agency for any loan issued under Part B, has engaged in 

conduct that interferes with one or more borrowers’ right to an alternative 

payment arrangement; loan forgiveness, cancellation, or discharge; or any other 

financial benefit as established under the terms of a borrower's promissory note or 

under the Higher Education Act of 1965 ( 20 U.S.C. Sec. 1070a et seq.), as from 

time to time amended, and the regulations promulgated thereunder; and 

(ii) a borrower does otherwise not meet eligibility requirements for forgiveness 

specified under paragraph (1).

(e) Targeted forgiveness programs. (1) The Secretary may waive up to the entire outstanding 

balance of a loan where the Secretary determines that a borrower has not successfully applied 

for, but otherwise meets the eligibility requirements for — 

(i) Public Service Loan Forgiveness under § 685.219; 

(ii) Closed School Discharge under § 674.33(g), § 682.402(d), or § 685.214; 

(iii) Borrower Defense to Repayment under part 685, subpart D; or 

(iv) aAny other loan discharge, cancellation, or forgiveness program under parts 674, 682 or 685. 

(2) The Secretary may waive up to the outstanding balance of a loan pursuant to 

paragraph (1) upon a determination by the Secretary that: 

(i) an entity awarded a contract by the Secretary under 20 U.S.C. 1087f, or any 

servicer or guaranty agency for any loan issued under Part B, has engaged in 

conduct that interferes with one or more borrowers’ right to an alternative 

payment arrangement; loan forgiveness, cancellation, or discharge; or any other 

financial benefit as established under the terms of a borrower's promissory note or 

under the Higher Education Act of 1965 ( 20 U.S.C. Sec. 1070a et seq.), as from 

time to time amended, and the regulations promulgated thereunder; and 
(ii) a borrower did otherwise not meet eligibility requirements for forgiveness 

specified under paragraph (1). 

(3) For any loan that that meets the criteria of paragraphs (1) or (2) but that has been 

repaid by a Federal Consolidation Loan or Direct Consolidation Loan that has an 

outstanding balance, the Secretary may waive the portion of the outstanding balance of 

the Consolidation Loan attributable to the loan meeting the criteria of paragraph (1). 

(4) For any loan that meets the criteria of paragraphs (1) or (2) with respect to unpaid 

refund discharge under § 685.216 or 685.402(l), the Secretary may waive the portion of 

the outstanding balance of the loan or Consolidation Loan not to exceed the relief the 

borrower would be entitled to upon receiving that unpaid refund discharge. 

§ 682.403 Waiver of FFEL Program loan debt. 

Waivers.

(1) The Secretary may waive the outstanding balance on an FFEL Program loan if the loan 

would qualify for a waiver under--

(i) 34 CFR 30.80(c); 

(ii) 34 CFR 30.80 (d)(1)(i); or 

(iii) 34 CFR 30.80 (e)(1)(ii) and (e)(1)(iv).

(2) After determining that a loan qualifies for a waiver under paragraph (a)(1) of this section, the 

Secretary may direct the lender to submit a claim to the guaranty agency so the loan can be 

assigned to the Secretary.

(3) After the loan is assigned, the Secretary may waive all or a portion of the loan in accordance 

with 34 CFR 30.80. 

(b) Lender and guaranty agency actions. 

(1) If the Secretary determines that a loan qualifies for a waiver under paragraph (a)(1) of this 

section— 

(i) The Secretary notifies the lender that the loan qualifies for a waiver;

(ii) The lender must submit a claim to the guaranty agency, within 60 days of the date the lender 

received the notification, that includes the following documentation: 

(A) An original or a true and exact copy of the promissory note. 

(B) The notification described in paragraph (b)(1)(i) of this section.

(2) If the claim meets the requirements of paragraph (b)(1)(ii) of this section, the guaranty 

agency must pay the claim submitted by the lender. 
(3) The Secretary reimburses the guaranty agency for a claim paid to the lender after the agency 

pays the claim to the lender.

(4) The guaranty agency must assign the loan to the Secretary within 45 days of the date the 

guaranty agency pays the claim and receives the reimbursement payment or within 45 days of 

the date the guaranty agency receives the notification described in paragraph (a)(2) of this 

section if the guaranty agency is the lender.