87130 Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 

1As discussed more fully below, these proposed 

regulations focus on the Secretary’s waiver 

authority under sections 432(a)(6) and 468(2) of the 

HEA. Section 432(a)(6) provides that, ‘‘in the 

performance of, and with respect to, the functions, 

powers and duties, vested in him by this part, the 

Secretary may . . . waive, or release any right, title, 

claim, lien, or demand, however acquired, 

including any equity or any right of redemption.’’ 

20 U.S.C. 1082(a)(6). Section 468(2), the Perkins 

Loan Program’s authorizing statute, features a 

similar waiver provision. 20 U.S.C. 1087hh(2). The 

Department views sections 432(a)(6) and 468(2) as 

permitting the Secretary to waive the Department’s 

right to require repayment of a debt when there are 

circumstances that warrant such relief, such as the 

circumstances specified in these proposed 

regulations. The Department acknowledges that 

several states have challenged the Department’s 

authority to waive loans under sections 432(a)(6) 

and 468(2) through litigation focused on separate 

proposed rules issued by the Department on April 

17, 2024 (89 FR 27564) that also rely on the 

Department’s waiver authority under the HEA. See 

Missouri v. Biden, No. 24–cv–1316 (E.D. Mo.). In 

that separate litigation, a Federal district court has 

preliminarily enjoined the Department ‘‘from 

implementing the Third Mass Cancellation Rule,’’ 

a term that the plaintiffs used to refer to the April 

2024 NPRM, and ‘‘from mass canceling student 

loans, forgiving any principal or interest, not 

charging borrowers accrued interest, or further 

implementing any other actions under the Rule or 

instructing federal contractors to take such actions.’’ 

Memorandum and Order, Doc. 57 at 3, Missouri v. 

Biden, No. 24–cv–1316 (E.D. Mo. Oct. 3, 2024). As 

of the publication of this NPRM, this litigation 

remains pending with no final decision on the 

merits, including no final decision pertaining to the 

Secretary’s authority under sections 432(a)(6) and 

468(2) of the HEA. 

DEPARTMENT OF EDUCATION 

34 CFR Part 30 

[Docket ID ED–2023–OPE–0123] 

RIN 1840–AD95 

Student Debt Relief Based on Hardship 

for the William D. Ford Federal Direct 

Loan Program (Direct Loans), the 

Federal Family Education Loan (FFEL) 

Program, the Federal Perkins Loan 

(Perkins) Program, and the Health 

Education Assistance Loan (HEAL) 

Program 

AGENCY: Office of Postsecondary 

Education, Department of Education. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Secretary proposes to 

amend the regulations related to the 

Higher Education Act of 1965, as 

amended (HEA), to provide for the 

waiver of certain student loan debts. 

The proposed regulations would specify 

the Secretary’s authority to waive all or 

part of any student loan debts owed to 

the Department based on the Secretary’s 

determination that a borrower has 

experienced or is experiencing hardship 

related to such a loan. 

DATES: We must receive your comments 

on or before December 2, 2024. 

ADDRESSES: Comments must be 

submitted via the Federal eRulemaking 

Portal at Regulations.gov. Information 

on using Regulations.gov, including 

instructions for finding a rule on the site 

and submitting comments, is available 

on the site under ‘‘FAQ.’’ If you require 

an accommodation or cannot otherwise 

submit your comments via 

Regulations.gov, please contact 

regulationshelpdesk@gsa.gov or by 

phone at 1–866–498–2945. The 

Department will not accept comments 

submitted by fax or by email or 

comments submitted after the comment 

period closes. Please submit your 

comment only once so that we do not 

receive duplicate copies. Additionally, 

please include the Docket ID at the top 

of your comments. 

Privacy Note: The Department’s 

policy is to generally make comments 

received from members of the public 

available for public viewing on the 

Federal eRulemaking Portal at 

Regulations.gov. Therefore, commenters 

should include in their comments only 

information about themselves that they 

wish to make publicly available. 

Commenters should not include in their 

comments any information that 

identifies other individuals or that 

permits readers to identify other 

individuals. If, for example, your 

comment describes an experience of 

someone other than yourself, please do 

not identify that individual or include 

information that would allow readers to 

identify that individual. The 

Department may not make comments 

that contain personally identifiable 

information (PII) about someone other 

than the commenter publicly available 

on Regulations.gov for privacy reasons. 

This may include comments where the 

commenter refers to a third-party 

individual without using their name if 

the Department determines that the 

comment provides enough detail that 

could allow one or more readers to link 

the information to the third party. For 

example, ‘‘a former student with a 

graduate level degree’’ does not provide 

information that identifies a third-party 

individual as opposed to ‘‘my sister, 

Jane Doe, had this experience while 

attending University X,’’ which does 

provide enough information to identify 

a specific third-party individual. For 

privacy reasons, the Department 

reserves the right to not make available 

on Regulations.gov any information in 

comments that identifies other 

individuals, includes information that 

would allow readers to identify other 

individuals, or includes threats of harm 

to another person or to oneself. 

FOR FURTHER INFORMATION CONTACT: 

Tamy Abernathy, U.S. Department of 

Education, Office of Postsecondary 

Education, 400 Maryland Avenue SW, 

5th floor, Washington, DC 20202. 

Telephone: (202) 245–4595. Email: 

NegRegNPRMHelp@ed.gov. 

If you are deaf, hard of hearing, or 

have a speech disability and wish to 

access telecommunications relay 

services, please dial 7–1–1. 

SUPPLEMENTARY INFORMATION: 

Executive Summary 

A brief summary of these proposed 

regulations is available at https://

www.regulations.gov/docket/ED-2023- 

OPE-0123. These proposed regulations 

would clarify the use of the Secretary’s 

longstanding authority to grant a waiver 

of some or all of the outstanding balance 

on a Federal student loan.1 Under this 

proposed rule, the Department would 

specify how the Secretary would 

exercise discretionary authority to grant 

waivers using the following standard: 

the Secretary would determine that a 

borrower is experiencing or has 

experienced hardship related to the 

loan: (1) that is likely to impair the 

borrower’s ability to fully repay the 

Federal government, or (2) that renders 

the costs of enforcing the full amount of 

the debt not justified by the expected 

benefits of continued collection of the 

entire debt (proposed § 30.91(a)). 

The proposed regulations would then 

provide a non-exhaustive list of factors 

the Secretary may consider in deciding 

whether to grant relief (proposed 

§ 30.91(b)). Then, proposed § 30.91(c) 

would provide a process by which the 

Secretary may grant individualized 

automatic relief through a predictive 

assessment based on the factors in 

proposed § 30.91(b). Should the 

Secretary choose to exercise such 

discretion, proposed § 30.91(c) would 

provide immediate, one-time relief as 

soon as practicable. And, proposed 

§ 30.91(d) would provide a primarily 

application-based process by which the 

Secretary may provide additional relief 

on an on-going basis. 

The proposed regulations describe 

two different pathways that the 

Secretary could take to exercise 

discretion to grant a waiver in instances 

where the borrower meets the hardship 

standard in proposed § 30.91(a). We 

describe those pathways in greater 

detail in the preamble below to assist 

the public in understanding how the 

proposed regulations would operate and 

to clarify terminology to guide such a 

discussion. 

The first pathway would be a 

‘‘predictive assessment,’’ pursuant to 

proposed § 30.91(c), under which the 

Secretary would consider information in 


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Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 87131 

2See 89 FR 27564 (April 17, 2024). As described 

above, see n.1, supra, a Federal district court has 

issued an injunction focused on these separate 

proposed rules published on April 17, 2024. See 

Missouri v. Biden, No. 24–cv–1316 (E.D. Mo.). As 

of the date of publishing this NPRM, that separate 

litigation focused on the April 2024 NPRM remains 

pending with no final decision on the merits. These 

regulations differ from the waivers proposed in the 

April 2024 NPRM along various dimensions, 

including that the provisions in these final 

regulations apply distinct and different eligibility 

criteria, and these provisions address different 

challenges with student loan repayment faced by 

borrowers and the Department. As further described 

throughout these proposed regulations, these 

provisions specify relief for borrowers that are 

experiencing or have experienced hardship that 

meet certain criteria. Specifically, under proposed 

§ 30.91(c), the Secretary could provide 

individualized automatic relief through a predictive 

assessment based on certain factors. Under 

proposed § 30.91(d), the Secretary could provide 

relief based on a holistic assessment of the 

borrower’s specific circumstances using the 

standard specified in these proposed regulations. 

Accordingly, the waivers in these proposed 

regulations would operate separately and distinctly 

from the waivers proposed in the April 2024 NPRM. 

3As described above, see n.1, supra, a Federal 

district court has issued an injunction focused on 

these separate proposed rules published on April 

17, 2024. See Missouri v. Biden, No. 24–cv–1316 

(E.D. Mo.). As of the date of publishing this NPRM, 

that separate litigation focused on the April 2024 

NPRM remains pending with no final decision on 

the merits. 

the Department’s possession to 

determine whether the borrower meets 

the proposed standard for hardship in 

§ 30.91(a) such that their loans are at 

least 80 percent likely to be in default 

within the next two years. The 

Department would make a predictive 

assessment that considers factors 

indicating hardship (described in 

proposed § 30.91(b)) and may, in the 

Secretary’s discretion, then provide 

immediate relief by granting waivers to 

eligible borrowers, without requiring 

any action by those borrowers to seek 

that relief. 

The second pathway, which is under 

proposed § 30.91(d), would be a 

determination based on a ‘‘holistic 

assessment’’ of the borrower’s 

circumstances (based on the factors in 

proposed § 30.91(b)) that meets the 

proposed hardship standard for waiver 

specified in proposed § 30.91(a). This 

assessment would focus on borrowers 

who are not otherwise eligible for the 

immediate relief under proposed 

§ 30.91(c) and who are not eligible for 

relief sufficient to redress their 

hardships through other Department 

programs supporting student loan 

borrowers. Under this pathway for 

relief, the Department would conduct a 

holistic assessment of the borrower’s 

hardship based on information about 

the borrower’s experience with the 

factors in proposed § 30.91(b) obtained 

through an application or based on 

information already within the 

Department’s possession, or a 

combination of the above. A borrower 

would be eligible for relief if, based on 

the Department’s holistic assessment, 

the Department determines that the 

borrower is highly likely to be in default 

or experience similarly severe negative 

and persistent circumstances, and other 

options for payment relief would not 

sufficiently address the borrower’s 

persistent hardship. 

The two pathways for relief described 

above, namely the immediate relief in 

proposed § 30.91(c) and the additional 

relief in proposed § 30.91(d), would 

operate separately and distinctly from 

each other and would therefore be fully 

severable. Because these proposed 

regulations only concern waivers due to 

hardship, these proposed hardship 

waivers would therefore also be separate 

and distinct from other proposed rules 

related to waivers of Federal student 

loan debt.2

Summary of This Regulatory Action 

These proposed regulations would 

add a new § 30.91, which would reflect 

in regulations the Secretary’s existing 

discretionary authority under section 

432(a)(6) of the HEA to waive some or 

all of the outstanding balance of a loan 

owed to the Department when the 

Secretary determines that a borrower 

has experienced or is experiencing 

hardship related to the loan such that 

the hardship is likely to impair the 

borrower’s ability to fully repay the 

Federal government, or the costs of 

enforcing the full amount of the debt are 

not justified by the expected benefits of 

continued collection of the entire debt. 

In addition to establishing this standard, 

the proposed provision would also 

specify the factors that the Secretary 

would consider in evaluating hardship 

and the particular processes by which 

the Secretary may provide relief under 

the standard for determining hardship. 

We note that the Department 

published a Notice of Proposed 

Rulemaking in the Federal Register on 

April 17, 2024 (April 2024 NPRM) (89 

FR 27564) but explained at that time 

that the April 2024 NPRM did not 

include proposed regulations for 

waivers related to hardship.3 As 

discussed in greater detail in the 

Negotiated Rulemaking section of this 

NPRM, hardship waivers were 

discussed at a fourth session of the 

negotiating committee on February 22 

and 23, 2024. The Committee reached 

consensus on proposed language, which 

is included in this NPRM. 

Costs and Benefits: As further detailed 

in the Regulatory Impact Analysis (RIA), 

the proposed regulations would have 

significant impacts on borrowers, 

taxpayers, and the Department. 

Instances in which the Secretary 

decides to waive all or part of a 

borrower’s outstanding loan balance 

would result in transfers between the 

Federal government and borrowers. This 

would create benefits for borrowers by 

eliminating the hardship they are facing 

with respect to their loans, allowing 

them to better afford necessities like 

food or housing, afford retirement, cover 

childcare or caretaking expenses, or 

otherwise improve their financial 

circumstances. In the case of a waiver of 

the full outstanding balance of the loan, 

a borrower would no longer have a 

repayment obligation and also no longer 

face the risk of delinquency or default. 

A borrower who receives a partial 

waiver would have a more affordable 

repayment obligation that could be 

repaid in full over time. The transfers 

resulting from the proposed regulations 

would be mitigated to the extent that the 

Secretary would exercise discretion to 

waive loans in whole or part where the 

borrower is unlikely to have the ability 

to repay, or where the costs of 

continued collection outweigh the 

benefits, allowing the Department to 

prioritize collection of loans that are 

most likely to be repaid. 

Beyond transfers, these regulations 

would create administrative costs for 

the Department to process and 

implement relief based upon 

information in the Department’s 

possession or based upon applications 

filed by borrowers. 

Invitation to Comment: We invite you 

to submit comments regarding these 

proposed regulations. For your 

comments to have maximum effect in 

developing the final regulations, we 

urge you to clearly identify the specific 

section or sections of the proposed 

regulations that each of your comments 

addresses and to arrange your comments 

in the same order as the proposed 

regulations. The Department will not 

accept comments submitted after the 

comment period closes. Please submit 

your comments only once so that we do 

not receive duplicate copies. 

The following tips are meant to help 

you prepare your comments and 

provide a basis for the Department to 

respond to issues raised in your 

comments in the notice of final 

regulations (NFR): 

• Be concise but support your claims. 

• Explain your views as clearly as 

possible and avoid using profanity. 

• Refer to specific sections and 

subsections of the proposed regulations 

throughout your comments, particularly 

in any headings that are used to 

organize your submission. 


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87132 Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 

• Explain why you agree or disagree 

with the proposed regulatory text and 

support these reasons with data-driven 

evidence, including the depth and 

breadth of your personal or professional 

experiences. 

• Where you disagree with the 

proposed regulatory text, suggest 

alternatives, including regulatory 

language, and your rationale for the 

alternative suggestion. 

• Do not include personally 

identifiable information (PII) such as 

Social Security numbers or loan account 

numbers for yourself or for others in 

your submission. Should you include 

any PII in your comment, such 

information may be posted publicly. 

• Do not include any information that 

directly identifies or could identify 

other individuals or that permits readers 

to identify other individuals. Your 

comment may not be posted publicly if 

it includes PII about other individuals. 

Mass Writing Campaigns: In instances 

where individual submissions appear to 

be duplicates or near duplicates of 

comments prepared as part of a writing 

campaign, the Department will post one 

representative sample comment along 

with the total comment count for that 

campaign to Regulations.gov. The 

Department will consider these 

comments along with all other 

comments received. 

In instances where individual 

submissions are bundled together 

(submitted as a single document or 

packaged together), the Department will 

post all the substantive comments 

included in the submissions along with 

the total comment count for that 

document or package to 

Regulations.gov. A well-supported 

comment is often more informative to 

the agency than multiple form letters. 

Public Comments: The Department 

invites you to submit comments on all 

aspects of the proposed regulatory 

language specified in this NPRM in 

§ 30.91, the Regulatory Impact Analysis, 

and Paperwork Reduction Act sections. 

The Department may, at its discretion, 

decide not to post or to withdraw 

certain comments and other materials 

that are computer-generated. Comments 

containing the promotion of commercial 

services or products and spam will be 

removed. 

We may not address comments 

outside of the scope of these proposed 

regulations in the NFR. Generally, 

comments that are outside of the scope 

of these proposed regulations are 

comments that do not discuss the 

content or impact of the proposed 

regulations or the Department’s 

evidence or reasons for the proposed 

regulations. 

Comments that are submitted after the 

comment period closes will not be 

posted to Regulations.gov or addressed 

in the NFR. 

Comments containing personal threats 

will not be posted to Regulations.gov 

and may be referred to the appropriate 

authorities. 

We invite you to assist us in 

complying with the specific 

requirements of Executive Orders 

12866, 13563, and 14094 and their 

overall requirement of reducing 

regulatory burden that might result from 

these proposed regulations. Please let us 

know of any further ways we could 

reduce potential costs or increase 

potential benefits while preserving the 

effective and efficient administration of 

the Department’s programs and 

activities. 

During and after the comment period, 

you may inspect public comments about 

these proposed regulations by accessing 

Regulations.gov. 

Assistance to Individuals with 

Disabilities in Reviewing the 

Rulemaking Record: On request, we will 

provide an appropriate accommodation 

or auxiliary aid to an individual with a 

disability who needs assistance to 

review the comments or other 

documents in the public rulemaking 

record for these proposed regulations. If 

you want to schedule an appointment 

for this type of accommodation or 

auxiliary aid, please contact one of the 

persons listed under FOR FURTHER

INFORMATION CONTACT. 

Directed Questions 

The Department is particularly 

interested in comments on the following 

directed questions: 

1. Is ‘‘two years’’ the appropriate 

measurement window for the waivers 

specified in proposed § 30.91(c) related 

to borrowers who are likely to be in 

default, or should the Department use a 

different time frame, and if so, what 

timeframe and why? 

2. Is ‘‘80 percent’’ likelihood of being 

in default within the next two years the 

appropriate eligibility threshold for 

immediate relief in proposed § 30.91(c), 

or should the Department consider a 

different likelihood percentage, and if 

so, what should it be and why? 

3. As described in this NPRM, 

eligibility for a hardship waiver under 

proposed § 30.91(d) would be relatively 

rare and limited to circumstances where 

the Secretary finds: (i) the borrower is 

highly likely to be in default, or 

experience similarly severe negative and 

persistent circumstances, and (ii) other 

options for payment relief would not 

sufficiently address the borrower’s 

persistent hardship. The Department 

invites feedback from the public on 

what circumstances constitute similarly 

severe negative and persistent 

circumstances that are comparable to 

default. 

4. Under proposed § 30.91(d), is 

‘‘highly likely’’ to be in default or to 

experience similarly severe negative and 

persistent circumstances the appropriate 

eligibility threshold? If so, why? If not, 

should the Department use a different 

likelihood threshold, and, if so, what 

threshold and why? 

5. How should the Department help 

make certain that borrowers have the 

opportunity to enroll or apply for other 

programs administered by the 

Department that may be advantageous to 

the borrower and successfully 

demonstrate a hardship that qualifies for 

a waiver under proposed § 30.91(d)? 

6. How can the Department improve 

or refine the estimates in the RIA related 

to the anticipated volume of 

applications for the application-based 

hardship waiver process, as well as the 

estimates related to the approval rate for 

such applications? 

7. As described in this NPRM, the 

Department believes a presumption in 

favor of a full waiver is appropriate and 

would provide consistency in decisionmaking, but that this presumption could 

be rebutted in certain circumstances. 

For example, the Secretary may find the 

presumption in favor of full waiver is 

rebutted if there is evidence that a 

partial waiver would sufficiently reduce 

a borrower’s monthly payment in a 

manner that alleviates their hardship 

under these regulations. The 

Department seeks input from the public 

on the types of circumstances and 

evidence that the Department should 

consider to determine when partial 

relief is more appropriate. 

8. Under what circumstances, 

pursuant to proposed § 30.91(d), would 

a borrower who is eligible for a $0 

monthly payment under an incomedriven repayment plan meet the 

standard for relief in proposed 

§ 30.91(d) of being highly likely to be in 

default or experience similarly severe 

and persistent negative circumstances, 

and other options for payment relief 

would not sufficiently address the 

borrower’s persistent hardship? 

9. Under what circumstances would a 

borrower be highly likely to be in 

default, or experience similarly severe 

negative and persistent circumstances, 

such that relief pursuant to proposed 

§ 30.91(d) would be appropriate? 

10. What type of data could the 

Department use to determine whether a 

borrower who has not submitted an 

application qualifies for relief under 


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Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 87133 

4For example, the published tuition and fees for 

public four-year, public two-year, and private 

nonprofit four-year institutions were, respectively, 

209 percent, 151 percent, and 178 percent higher 

than those costs in the early 1990s (inflation 

adjusted). Over a similar time period, incomes rose 

by about 30 percent-40 percent among families 

outside of the top quintile, and 65 percent for 

families in the top quintile (inflation adjusted). See 

Ma, Jennifer and Matea Pender. Trends in College 

Pricing and Student Aid 2023 (2023). New York: 

College Board. 

5Avery, Christopher and Sarah Turner. ’’Student 

loans: Do college students borrow too much—or not 

enough?.’’ Journal of Economic Perspectives vol. 26, 

no. 1 (2012): 165–192. Lovenheim, Michael, and 

Jonathan Smith. ‘‘Returns to different 

postsecondary investments: Institution type, 

academic programs, and credentials.’’ Handbook of 

the Economics of Education vol. 6 (2023): 187–318. 

Elsevier. 

6Matsudaira, Jordan. ‘‘The Economic Returns to 

Postsecondary Education: Public and Private 

Perspectives.’’ Postsecondary Value Commission 

(2021). Moretti, Enrico. Estimating the social return 

to higher education: evidence from longitudinal and 

repeated cross-sectional data. Journal of 

Econometrics 121, no. 1–2 (2004): 175–212. 

7See 20 U.S.C. 1087e(e) and 20 U.S.C. 1098e. 

8See, for example, this US Government 

Accountability Office (GAO) report that 

demonstrates higher rates of debt among older 

Americans, https://www.gao.gov/products/gao-21- 

170. For a discussion of how medical costs account 

for a larger share of expenditures among older 

individuals also see, Banks, James, Richard 

Blundell, Peter Levell, and James P. Smith. ‘‘Lifecycle consumption patterns at older ages in the 

United States and the United Kingdom: Can 

medical expenditures explain the difference?.’’ 

American Economic Journal: Economic Policy 11, 

no. 3 (2019): 27–54. 

9See Sweet v. Cardona, 641 F. Supp. 3d 814, 

823–25 (N.D. Cal. 2022); Weingarten v. DOE, 468 F. 

Supp. 3d 322, 328 (D.D.C. 2020); Chae v. SLM 

Corp., 593 F.3d 936, 945 (9th Cir. 2010). 

proposed § 30.91(d), and how could ED 

obtain those data? 

11. If the Department were to 

establish a cap on the amount of relief 

eligible borrowers could receive, what 

would be a reasonable cap and what 

data, research, or other information 

would support the setting of such a cap? 

The Department is particularly 

interested in different approaches for 

formulating and justifying the amount of 

capped relief. For example, the 

Department welcomes feedback on 

whether the Department should apply 

any of the following approaches: a 

universal cap, a progressive cap based 

on the extent of the hardship up to a 

maximum possible limit, or a cap that 

provides proportional relief based on 

other circumstances. 

Background 

Federal student loans provide an 

important resource for Americans to 

enroll in postsecondary education 

programs if they do not have the 

financial means to pay the total cost of 

attendance up front. Because 

postsecondary education generally 

provides economic returns, the 

increased financial benefits from greater 

education and training can be used to 

repay the debts incurred to pay for those 

opportunities. 

Unfortunately, over the decades since 

the HEA was enacted, the increasing 

price of postsecondary education has 

exceeded the growth in family 

incomes.4 For many students, available 

grant aid is not sufficient to cover 

postsecondary expenses, leading 

Federal student loans to fill a critical 

and inescapable gap in postsecondary 

education financing for many families. 

Generally, financing postsecondary 

education with loans yields returns— 

such as increased income—that help 

borrowers afford their debts.5 Increasing 

access to higher education through 

student loans also provides welldocumented benefits to communities 

and to the national economy and 

society. These benefits extend even to 

individuals who never attended college 

themselves. For example, college 

certificate and degree attainment 

typically lead to higher earnings, 

increasing the ability of individuals to 

spend money and invest in their local 

community.6

The HEA contains many provisions 

intended to assist borrowers when their 

investment in postsecondary education 

does not result in the expected benefits. 

The Department offers several options 

for payment relief and other forgiveness 

opportunities. For example, when an 

educational institution misrepresents 

the value of an education financed with 

a student loan, the HEA authorizes 

discharge of the obligation through a 

borrower defense claim. The HEA also 

provides for discharge when a school 

falsely certifies a borrower’s eligibility 

for a loan, or someone obtains a loan in 

the borrower’s name through identity 

theft. Other types of loan discharges are 

available if a borrower is unable to 

complete a program because an 

institution closes, or if the borrower 

becomes totally and permanently 

disabled. 

The Department offers several 

different repayment options, some of 

which base payments on a borrower’s 

income and forgive any remaining 

amounts after an extended period of 

payments, which is either 20 or 25 years 

for most plans.7

While existing discharge and 

repayment programs provide critical 

relief to borrowers, they do not capture 

the full set of circumstances that may 

impair borrowers’ ability to fully repay 

their loans. Many situations unique to 

individual borrowers can cause 

borrowers to experience significant 

hardship repaying student loans and 

may make the cost of collecting the loan 

exceed the expected benefits of 

continued collection. Such situations 

often are not covered by existing 

avenues for relief. For example, older 

borrowers with high educational debt 

burdens can be at increased risk of 

financial insecurity since they are also 

more likely to be exposed to higher 

medical costs and declining incomes.8

But these risks are not factored into the 

determination of eligibility for relief 

under existing Department programs. 

Borrowers with significant medical 

expenses, dependent care expenses, or 

other extraordinary and necessary costs 

also may not qualify for other discharge 

and repayment programs, which do not 

assess such expenses in determining 

eligibility. 

These proposed regulations would 

clarify how the Secretary would 

exercise their authority to waive some 

or all outstanding loan debt in certain 

situations where the Secretary 

determines that a borrower is facing 

hardship that impairs their ability to 

fully repay the loan or imposes 

unwarranted costs that exceed the 

benefits of continued collection. The 

proposed regulations describe the 

transparent, reasonable, and equitable 

factors the Secretary would use to 

determine when such waivers could be 

granted. 

Section 432(a) of the HEA outlines the 

Secretary’s legal powers and 

responsibilities relevant to this 

rulemaking. That section delegates to 

the Secretary the discretion to exercise 

certain ‘‘general powers.’’ In particular, 

section 432(a)(6) provides that, ‘‘in the 

performance of, and with respect to, the 

functions, powers and duties, vested in 

him by this part, the Secretary may 

enforce, pay, compromise, waive, or 

release any right, title, claim, lien, or 

demand, however acquired, including 

any equity or any right of redemption.’’ 

The provisions of section 432(a)(6) are 

in, and explicitly apply to, title IV, part 

B, of the HEA, which establishes the 

FFEL program. Section 432(a)(6), 

however, also applies to the Direct Loan 

program. In creating the Direct Loan 

program, Congress established parity 

between the FFEL and Direct Loan 

programs, providing in section 451(b)(2) 

of the HEA that Federal Direct Loans 

‘‘have the same terms, conditions, and 

benefits as loans made to borrowers’’ 

under the FFEL program. 20 U.S.C. 

1087a(b)(2).9 By its plain language, 

section 451(b)(2) requires that the 

benefits of FFEL loans should be 

available under the Direct Loan 

program, including the benefit to a 

borrower when the Secretary exercises 


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10https://www.merriam-webster.com/dictionary/ 

benefit. 

11See Public Law 89–329, 79 Stat. 1246 (Nov. 8, 

1965). 

12The authority to waive loan balances is 

provided by the statutory text of the HEA, such that 

the Secretary’s exercise of this authority in this 

proposed regulation is unaffected by the Supreme 

Court’s decision in Biden v. Nebraska, 600 U.S. 477 

(2023). In Nebraska, the Court interpreted a 

provision of the HEROES Act, which authorizes 

waiver or modification of ‘‘statutory or regulatory 

provisions’’ applicable to the Federal student loan 

programs under certain circumstances. The Court 

found that the debt-relief program at issue there 

exceeded the scope of the HEROES Act authority 

to waive and modify rules. Here, unlike in 

Nebraska, the Secretary’s waiver authority derives 

from section 432(a)(6) of the HEA, which broadly 

authorizes waiver of Department claims, and 

therefore applies directly to ‘‘waiving loan balances 

or waiving the obligation to repay on the part of the 

borrower.’’ Nebraska, 600 U.S. at 497 (internal 

citation omitted). 

13 89 FR 27564 (April 17, 2024). As described 

above, see n.1, supra, a Federal district court has 

issued an injunction focused on these separate 

proposed rules published on April 17, 2024. See 

Missouri v. Biden, No. 24–cv–1316 (E.D. Mo.). As 

of the date of publishing this NPRM, that separate 

litigation focused on the April 2024 NPRM remains 

pending with no final decision on the merits. 

14Borrowers who may be included in this model 

are those who have at least one federally held loan 

that has entered repayment. 

discretionary authority under section 

432(a)(6) to waive loan obligations for 

those experiencing hardship. A benefit 

is ‘‘something that produces good or 

helpful results or effects,’’ 10 and 

disallowing Direct Loan borrowers 

experiencing hardships the same 

opportunity as FFEL borrowers to have 

all or part of the balance of their loans 

eliminated plainly would afford 

different benefits between the loan 

programs, the result section 451(b)(2) 

was created to avoid. 

The Secretary’s waiver authority 

under section 432(a)(6) of the HEA also 

extends to HEAL and Perkins loans. 

When transferring the HEAL loan 

program to the Department, Congress 

explicitly stated that the Secretary’s 

powers with respect to collecting FFEL 

loans extend to HEAL loans. See 

Division H, title V, section 525(d) of the 

Consolidated Appropriations Act, 2014 

(Pub. L. 113–76). Likewise, section 

468(2) of the HEA endows the Secretary 

with similarly broad and flexible 

powers with respect to loans arising 

under the Perkins program. 

The Department’s statutory waiver 

authority dates to the enactment of the 

Higher Education Act in 1965.11 The 

Department has viewed its waiver 

authority as permitting the Secretary to 

waive the Department’s right to require 

repayment of a debt.12 Having such 

bounded flexibility is critical for the 

Department’s administration of the 

comprehensive and complex student 

loan programs, where unforeseen 

challenges could, absent waiver, 

interfere with the Secretary’s ability to 

administer the title IV programs 

effectively and efficiently. 

The Department’s waiver authority 

operates within the context of the HEA’s 

text, structure, and goals, and the wellestablished principles that govern debt 

collection and waiver more broadly. 

Some agencies that exercise waiver 

authority consider whether collection of 

debts would be against equity and good 

conscience or the best interest of the 

United States. Agencies have also 

articulated numerous factors that may 

weigh in favor of waiving an 

individual’s debt, including when 

collection would defeat the purpose of 

the benefit program or impose financial 

hardship, among other considerations. 

We have taken such factors into 

consideration here. 

On June 30, 2023, the Department 

announced that it would conduct a 

negotiated rulemaking process to 

specify the standard the Secretary plans 

to use in exercising the Secretary’s 

authority to waive loan debts under 

section 432(a) of the HEA. On April 17, 

2024, the Department published the 

April 2024 NPRM, laying out some of 

the proposals from the negotiated 

rulemaking process, including the 

waiver of loans that have seen their 

balances grow far beyond what they 

were upon entering repayment, loans 

that first entered repayment a long time 

ago, loans held by borrowers that are 

otherwise eligible for certain forgiveness 

opportunities, or debts taken out to 

attend programs or institutions that 

failed to provide sufficient financial 

value.13

The waivers proposed in this NPRM 

are distinct from those in the April 2024 

NPRM and are specifically related to 

determinations about whether 

borrowers are facing, or have faced, 

hardship. While it is possible that a 

borrower could qualify for a waiver 

under these proposed regulations as 

well as under other proposed and 

existing regulations, this NPRM is fully 

separate from, and these proposed 

regulations would operate 

independently of, such other 

regulations. In addition, paragraphs (a) 

through (d) of proposed § 30.91 would 

operate independently of each other and 

therefore would be fully severable, as 

more fully explained below. 

Pathways to Relief 

In this NPRM, the Department 

describes two pathways by which the 

Secretary could exercise discretion to 

provide waivers of some or all of the 

outstanding balance of a Federal student 

loan held by the Department. Both of 

these proposed pathways would operate 

separately and independently from each 

other and therefore would be fully 

severable. As noted above, the 

regulations specify: (i) a pathway for 

‘‘immediate relief’’ using a predictive 

assessment in proposed § 30.91(c); (ii) a 

pathway for ‘‘additional relief’’ using a 

holistic assessment in proposed 

§ 30.91(d) based on an application or 

data already in the Secretary’s 

possession, or a combination of both. 

Under both pathways to relief, the 

Secretary proposes to analyze each 

individual borrower’s circumstances, as 

reflected in the factors in proposed 

§ 30.91(b), to determine whether the 

borrower is experiencing or has 

experienced hardship as defined by 

these regulations. 

Under the first pathway to relief, 

using a ‘‘predictive assessment’’ as 

described in proposed § 30.91(c), the 

Secretary would use data already in the 

Department’s possession (that is, not 

acquired by application) to identify 

borrowers who meet the standard in 

proposed § 30.91(a) such that they are at 

least 80 percent likely to be in default 

in the next two years after the proposed 

regulations’ publication date.14 The 

Secretary would conduct this analysis 

by using a predictive model that 

considers the borrower’s circumstances 

as described by factors in proposed 

§ 30.91(b). The Secretary then could 

choose to exercise discretion to grant 

‘‘immediate relief’’ to borrowers who 

qualify under proposed § 30.91(c). 

Under the second pathway for relief, 

described in proposed § 30.91(d), the 

Secretary may exercise discretion to 

grant a waiver to a borrower who meets 

the standard of hardship based on a 

holistic assessment of the borrower’s 

circumstances, based on the factors 

described in proposed § 30.91(b). The 

Department interprets the hardship 

required for relief under proposed 

§ 30.91(d) as: the borrower must be 

highly likely to be in default or 

experience similarly severe negative and 

persistent circumstances, and other 

options for payment relief would not 

sufficiently address the borrower’s 

persistent hardship. This holistic 

assessment may rely on data already in 

the Secretary’s possession or acquired 

from a borrower through an application 

process that would allow a borrower to 

provide additional data relevant to the 

factors in proposed § 30.91(b), or a 

combination of both. The Department 

anticipates that the number of borrowers 

for whom the Department possesses 

sufficient information to conduct the 


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15See HEA section 432(a)(6). 

16 88 FR 43069 (July 6, 2023). 17 88 FR 60163 (August 31, 2023). 

holistic assessment without data 

acquired from an application would be 

small. 

These proposed regulations account 

for challenges facing individual 

borrowers, while also recognizing that 

many borrowers are similarly situated. 

The Department has a longstanding 

practice of providing appropriate relief 

when it identifies specific 

circumstances that warrant relief and 

affect multiple borrowers. Such relief, 

regardless of how data is collected to 

make a determination about relief, is 

appropriate when individuals share 

relevant features. This approach 

comports with the HEA’s statutory 

requirements and can also help to 

improve administrative efficiency and 

provide consistency across borrowers.15

Overall, these proposed regulations 

would provide important transparency 

and clarity about how the Secretary may 

exercise the discretion to provide relief 

in situations where a borrower is facing, 

or has faced, a hardship that might not 

be addressed through other means. 

Providing relief in such situations 

would help alleviate the challenge of 

repaying student loans for many 

individual borrowers and better target 

the costs involved in the Department’s 

efforts to enforce collection and 

repayment. 

Public Participation 

The Department has significantly 

engaged the public in developing this 

NPRM, as described here and below in 

the Negotiated Rulemaking section. 

On July 6, 2023, the Department 

published a document in the Federal 

Register 16 announcing our intent to 

establish a negotiated rulemaking 

committee to prepare proposed 

regulations pertaining to the Secretary’s 

authority under section 432(a) of the 

HEA, which relates to the modification, 

waiver, or compromise of loans. 

On July 18, 2023, the Department held 

a virtual public hearing at which 

individuals and representatives of 

interested organizations provided 

advice and recommendations relating to 

the topic of proposed regulations on the 

modification, waiver, or compromise of 

loans. The Department considered the 

oral comments made by the public 

during the public hearing and written 

comments submitted between July 6, 

2023, and July 20, 2023. We also held 

four negotiated rulemaking sessions of 

two days each. During each daily 

negotiated rulemaking session, we 

provided an opportunity for public 

comment. The fourth two-day session in 

February 2024 focused exclusively on 

the issue of hardship criteria for 

discharge and the public had an 

opportunity to comment on the first day 

of that session. Additionally, nonFederal negotiators shared feedback 

from their stakeholders with the 

negotiating committee. 

The Department accepted written 

comments on possible regulatory 

provisions that were submitted directly 

to the Department by interested parties 

and organizations. You may view the 

written comments submitted in 

response to the July 6, 2023, Federal 

Register document on the Federal 

eRulemaking Portal at Regulations.gov, 

within docket ID ED–2023–OPE–0123. 

Instructions for finding comments are 

also available on the site under ‘‘FAQ.’’ 

Transcripts of the public hearings 

may be accessed at https://

www2.ed.gov/policy/highered/reg/ 

hearulemaking/2023/index.html. 

Negotiated Rulemaking 

Section 492 of the HEA, 20 U.S.C. 

1098a, requires the Secretary to obtain 

public involvement in the development 

of proposed regulations affecting 

programs authorized by title IV of the 

HEA. After obtaining extensive input 

and recommendations from the public, 

including individuals and 

representatives of groups involved in 

the title IV, HEA programs, the 

Secretary, in most cases, must engage in 

the negotiated rulemaking process 

before publishing proposed regulations 

in the Federal Register. If negotiators 

reach consensus on the proposed 

regulations, the Department agrees to 

publish without substantive alteration a 

defined group of regulations on which 

the negotiators reached consensus, 

unless the Secretary reopens the process 

or provides a written explanation to the 

participants stating why the Secretary 

has decided to depart from the 

agreement reached during negotiations. 

Further information on the negotiated 

rulemaking process can be found at: 

https://www2.ed.gov/policy/highered/ 

reg/hearulemaking/2023/index.html. 

On August 31, 2023, the Department 

published a document in the Federal 

Register 17 announcing its intention to 

establish the Committee to prepare 

proposed regulations for the title IV, 

HEA programs. This document set forth 

a schedule for Committee meetings and 

requested nominations for individual 

negotiators to serve on the negotiating 

committee. In the document, we 

announced the topics that the 

Committee would address. 

The Committee included the 

following members, representing their 

respective constituencies: 

• Civil Rights Organizations: Wisdom 

Cole, NAACP, and India Heckstall 

(alternate), Center for Law and Social 

Policy. 

• Legal Assistance Organizations that 

Represent Students or Borrowers: Kyra 

Taylor, National Consumer Law Center, 

and Scott Waterman (alternate), Student 

Loan Committee of the National 

Association of Chapter 13 Trustees. 

• State Officials, including State 

higher education executive officers, 

State authorizing agencies, and State 

regulators of institutions of higher 

education: Lane Thompson, Oregon 

DCBS—Division of Financial 

Regulation, and Amber Gallup 

(alternate), New Mexico Higher 

Education Department. 

• State Attorneys General: Yael 

Shavit, Office of the Massachusetts 

Attorney General, and Josh Divine 

(alternate), Missouri Attorney General’s 

Office who withdrew from the 

committee during the third session. 

• Public Institutions of Higher 

Education, Including Two-Year and 

Four-Year Institutions: Melissa Kunes, 

The Pennsylvania State University, and 

J.D. LaRock (alternate), North Shore 

Community College. 

• Private Nonprofit Institutions of 

Higher Education: Angelika Williams, 

University of San Francisco, and Susan 

Teerink (alternate), Marquette 

University. 

• Proprietary Institutions: Kathleen 

Dwyer, Galen College of Nursing, and 

Belen Gonzalez (alternate), Mech-Tech 

College. 

• Historically Black Colleges and 

Universities, Tribal Colleges and 

Universities, and Minority Serving 

Institutions (institutions of higher 

education eligible to receive Federal 

assistance under title III, parts A and F, 

and title V of the HEA): Sandra Boham, 

Salish Kootenai College, and Carol 

Peterson (alternate), Langston 

University. 

• Federal Family Education Loan 

(FFEL) Lenders, Servicers, or Guaranty 

Agencies: Scott Buchanan, Student Loan 

Servicing Alliance, and Benjamin Lee 

(alternate), Ascendium Education 

Solutions, Inc. 

• Student Loan Borrowers Who 

Attended Programs of Two Years or 

Less: Ashley Pizzuti, San Joaquin Delta 

College, and David Ramirez (alternate), 

Pasadena City College. 

• Student Loan Borrowers Who 

Attended Four-Year Programs: Sherrie 

Gammage, The University of New 

Orleans, and Sarah Christa Butts 

(alternate), University of Maryland. 


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18 89 FR 27564 (April 17, 2024). As described 

above, see n.1, supra, a Federal district court has 

issued an injunction focused on these separate 

proposed rules published on April 17, 2024. See 

Missouri v. Biden, No. 24-cv-1316 (E.D. Mo.). As of 

the date of publishing this NPRM, that separate 

litigation focused on the April 2024 NPRM remains 

pending with no final decision on the merits. 

19 89 FR 7317 (February 2, 2024). 

• Student Loan Borrowers Who 

Attended Graduate Programs: Richard 

Haase, State University of New York at 

Stony Brook, and Dr. Jalil Bishop 

(alternate), University of California, Los 

Angeles. 

• Currently Enrolled Postsecondary 

Education Students: Jada Sanford, 

Stephen F. Austin University, and 

Jordan Nellums (alternate), University of 

Texas. 

• Consumer Advocacy Organizations: 

Jessica Ranucci, New York Legal 

Assistance Group, and Ed Boltz 

(alternate), Law Offices of John T. 

Orcutt, P.C. 

• Individuals with Disabilities or 

Organizations Representing Them: John 

Whitelaw, Community Legal Aid 

Society Inc., and Waukecha Wilkerson 

(alternate), Sacramento State University. 

• U.S. Military Service Members, 

Veterans, or Groups Representing Them: 

Vincent Andrews, Veteran. Originally 

the alternate, Mr. Andrews became the 

primary negotiator for this constituency 

group after Michael Jones withdrew 

from the Committee. 

• Federal Negotiator: Tamy 

Abernathy, U.S. Department of 

Education. 

At its first meeting, the Committee 

reached agreement on its protocols and 

proposed agenda. The protocols 

provided, among other things, that the 

Committee would operate by consensus. 

The protocols defined consensus as no 

dissent by any negotiator of the 

Committee for the Committee to be 

considered to have reached agreement 

and noted that consensus votes would 

be taken on each separate part of the 

proposed rules. 

The Committee reviewed and 

discussed the Department’s drafts of 

regulatory language and alternative 

language and suggestions proposed by 

negotiators. 

At its third meeting in December 

2023, the Committee reached consensus 

on some proposed regulations that have 

since been published in the April 2024 

NPRM.18 That NPRM also included all 

other proposed provisions from the 

third session on which consensus was 

not reached. 

On February 2, 2024, the Department 

published a document in the Federal 

Register 19 announcing a fourth session 

of Committee negotiations on February 

22 and 23, 2024 to focus exclusively on 

the issue of borrowers facing hardship. 

Some primary or alternate negotiators 

were unable to attend the fourth session 

of Committee negotiations in February 

2024. Where the primary was unable to 

attend, the alternate filled the role of 

primary. The following Committee 

members participated in the fourth 

session, representing their respective 

constituencies: 

• Civil Rights Organizations: Wisdom 

Cole, NAACP. 

• Legal Assistance Organizations that 

Represent Students or Borrowers: Scott 

Waterman (alternate who served as 

primary), Student Loan Committee of 

the National Association of Chapter 13 

Trustees. 

• State Officials, including State 

higher education executive officers, 

State authorizing agencies, and State 

regulators of institutions of higher 

education: Lane Thompson, Oregon 

DCBS—Division of Financial 

Regulation. 

• State Attorneys General: Yael 

Shavit, Office of the Massachusetts 

Attorney General. 

• Public Institutions of Higher 

Education, Including Two-Year and 

Four-Year Institutions: Melissa Kunes, 

The Pennsylvania State University. 

• Private Nonprofit Institutions of 

Higher Education: Angelika Williams, 

University of San Francisco, and Susan 

Teerink (alternate), Marquette 

University. 

• Proprietary Institutions: Kathleen 

Dwyer, Galen College of Nursing, and 

Belen Gonzalez (alternate), Mech-Tech 

College. 

• Historically Black Colleges and 

Universities, Tribal Colleges and 

Universities, and Minority Serving 

Institutions (institutions of higher 

education eligible to receive Federal 

assistance under title III, parts A and F, 

and title V of the HEA): Carol Peterson 

(alternate who served as primary), 

Langston University. 

• Federal Family Education Loan 

(FFEL) Lenders, Servicers, or Guaranty 

Agencies: Scott Buchanan, Student Loan 

Servicing Alliance. 

• Student Loan Borrowers Who 

Attended Programs of Two Years or 

Less: Ashley Pizzuti, San Joaquin Delta 

College. 

• Student Loan Borrowers Who 

Attended Four-Year Programs: Sarah 

Christa Butts (alternate who served as 

primary), University of Maryland. 

• Student Loan Borrowers Who 

Attended Graduate Programs: Richard 

Haase, State University of New York at 

Stony Brook, and Dr. Jalil Bishop 

(alternate), University of California, Los 

Angeles. 

• Currently Enrolled Postsecondary 

Education Students: Jordan Nellums 

(alternate who served as primary), 

University of Texas. 

• Consumer Advocacy Organizations: 

Jessica Ranucci, New York Legal 

Assistance Group, and Ed Boltz 

(alternate), Law Offices of John T. 

Orcutt, P.C. 

• Individuals with Disabilities or 

Organizations Representing Them: John 

Whitelaw, Community Legal Aid 

Society Inc. 

• U.S. Military Service Members, 

Veterans, or Groups Representing Them: 

Vincent Andrews, Veteran. 

• Federal Negotiator: Tamy 

Abernathy, U.S. Department of 

Education. 

For more information about the 

Committee membership in the fourth 

session, please visit our Session 4 

Meeting Summary: https://

www2.ed.gov/policy/highered/reg/ 

hearulemaking/2023/final-session-4- 

summary-2-27-24.pdf. 

During that fourth session, the 

Department presented regulatory text for 

waivers that could assist borrowers who 

have experienced or are experiencing 

hardship. The negotiators reached 

consensus on this language. 

This NPRM only includes proposed 

regulations on hardship. Because the 

Committee reached consensus on the 

proposed regulations, the proposed 

regulatory text in this NPRM is the same 

text on which consensus was reached. 

For more information on the 

negotiated rulemaking sessions, please 

visit: https://www2.ed.gov/policy/ 

highered/reg/hearulemaking/2023/ 

index.html. 

Summary of Proposed Changes 

These proposed regulations would 

add § 30.91 specifying the Secretary’s 

authority to waive some or all of the 

outstanding balance of a loan owed to 

the Department when the Secretary 

determines that a borrower has 

experienced or is experiencing hardship 

related to the loan such that the 

hardship is likely to impair the 

borrower’s ability to fully repay the 

Federal government or the costs of 

enforcing the full amount of the debt are 

not justified by the expected benefits of 

continued collection of the entire debt. 

Significant Proposed Regulations 

We discuss substantive issues under 

the sections of the proposed regulations 

to which they pertain. Generally, we do 

not address proposed regulatory 

provisions that are technical or 

otherwise minor in effect. For each 

section of the regulations discussed, we 

include the statutory citation, the 

current regulations being revised (if 


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20See 20 U.S.C. 1087hh(2). 

21 In enacting the HEA, Congress emphasized a 

central purpose was to ‘‘extend the benefits of 

college education to increasing numbers of students 

. . . drawing upon the unique and invaluable 

resources of . . . universities to deal with national 

problems of poverty and community development.’’ 

H.R. Rep. 80–561 (1965) at 2–3. Title IV was 

Continued 

applicable), the new proposed 

regulatory text, and the reasons why we 

proposed to add new regulatory text or 

revise the existing regulatory text. 

§ 30.91(a) Standard for Waiver Due to 

Hardship 

Statute: Section 432(a) of the HEA (20 

U.S.C. 1082(a)) provides that in the 

performance of, and with respect to, the 

functions, powers, and duties, vested in 

him by this part, the Secretary may 

enforce, pay, compromise, waive, or 

release any right, title, claim, lien, or 

demand, however acquired, including 

any equity or any right of redemption. 

Section 468(2) of the HEA endows the 

Secretary with similarly broad and 

flexible powers with respect to loans 

arising under the Perkins program.20

Current Regulations: None. 

Proposed Regulations: Under 

proposed § 30.91(a), the Secretary may 

waive up to the outstanding balance of 

a Federal student loan owed to the 

Department when the Secretary 

determines that the borrower has 

experienced or is experiencing hardship 

related to that Federal student loan such 

that the hardship is likely to impair the 

borrower’s ability to fully repay the 

Federal government, or the Secretary 

has determined that the costs of 

enforcing the full amount of the debt are 

not justified by the expected benefits of 

continued collection of the entire debt. 

Reasons: Proposed § 30.91(a) sets 

forth the purpose of proposed § 30.91. It 

clarifies both the types of Federal loans 

that could be considered for waiver 

under proposed § 30.91 as well as the 

proposed standard that the Department 

would apply to determine if a borrower 

has faced, or is facing, hardship in a 

manner and extent that makes the 

borrower eligible for relief. 

The Department proposes to include 

all types of Federal student loans held 

by the Department in § 30.91 because, 

among loans held by the Department, no 

programmatic differences exist between 

the loan types that would justify waiver 

of some of a borrower’s loans and not 

others. 

The Department proposes to consider 

waiver in situations in which a 

borrower ‘‘has experienced’’ or ‘‘is 

experiencing’’ hardship, because, in 

addition to current hardship that may 

raise immediate concerns, there could 

be situations where the Department has 

clear indicators of hardship, but such 

indicators may not be current. The 

Department believes that in certain 

situations, it would be appropriate and 

reasonable for the Department to infer 

that the past observed hardship has 

continued. For example, if the 

Department has evidence from two 

years ago that a borrower has an 

incurable and chronic condition, then it 

would be reasonable to infer that 

situation has continued. It is also likely 

that, because reviewing information 

submitted by a borrower would involve 

significant Department staff time, the 

Department could make reasonable 

assumptions and inferences about facts 

that might have changed during the 

intervening time. The Department 

would retain the ability to request 

updated information if necessary to 

reach a determination. 

Acknowledging past hardship also 

recognizes that previous periods of 

hardship may have current and future 

consequences for a borrower. For 

example, a borrower who struggled to 

repay their loans may have seen their 

balance increase in size such that full 

repayment of that greater amount is no 

longer feasible. 

In all cases, the Secretary would only 

consider waiver of loans that are 

outstanding. The Department would not 

consider waivers of loans that are paid 

off or otherwise satisfied because, once 

repaid, a borrower’s debt no longer 

exists. Moreover, a borrower could not 

be experiencing hardship that meets the 

proposed standard on a Federal loan 

that has been repaid. For the same 

reason, the Department would also not 

consider reimbursement of payments 

made on loans that are outstanding. 

As noted above, the Department’s 

proposed standard for assessing whether 

a borrower’s hardship circumstances 

warrant relief involves determining 

whether such circumstances are likely 

to impair the borrower’s ability to fully 

repay the Federal government or the 

costs of enforcing the full amount of the 

debt are not justified by the expected 

benefits of continued collection of the 

entire debt. 

The Department proposes to evaluate 

whether a hardship is likely to impair 

the borrower’s ability to fully repay the 

Federal government for several reasons. 

Whether a borrower can fully repay the 

debt aligns with general Federal 

principles of debt collection that guide 

agencies on the appropriateness of 

discharging all or part of a debt when 

the borrower is unlikely to fully repay 

their debt within a reasonable period or 

the agency is unlikely to collect the debt 

in full within a reasonable period. See, 

e.g., 31 CFR 902.2(a)(1) and (2). 

Considering situations where the 

borrower’s hardship is ‘‘likely’’ to 

impair the ability to fully repay a loan 

allows the Department to make a 

reasonable, informed predictive 

determination regarding the impact of a 

borrower’s hardship, based upon factors 

that, from the Department’s experience 

with student aid programs, are strongly 

correlated with an inability to fully 

repay student loan obligations. The 

Department would assess these factors 

to predict which borrowers face or have 

faced hardship likely to cause continued 

impairment of their ability to repay a 

loan without jeopardizing their financial 

security. For example, lengthy time in 

repayment, in conjunction with other 

factors such as repayment history, may 

predict that a borrower may be unable 

to pay the loan without jeopardizing 

basic needs, such as housing, food, 

medication, and other essentials. Use of 

predictive measures would permit the 

Secretary to address hardships before 

borrowers suffer the most significant 

consequences associated with student 

loan struggles, such as delinquency and 

default and their follow-on effects. 

In addition to the impairment of a 

borrower’s ability to repay, the 

Department proposes an additional 

standard for evaluating eligibility for 

relief where a borrower’s hardship 

causes the cost of collection to exceed 

the expected benefits to the Federal 

government of continued collection. 

Such an approach acknowledges 

circumstances where it no longer 

advances the financial, operational, or 

programmatic goals of the Department 

to continue attempting to collect on a 

loan. In deciding whether collection 

advances such goals, the Department 

would consider a range of possible costs 

flowing from collection action. This 

might include financial and nonfinancial costs to the Department 

directly related to loan collection, such 

as compensating student loan servicers 

or debt collectors, and, because the 

Department’s resources are limited, 

operational and administrative costs 

associated with outreach to high-risk 

borrowers unlikely to repay loans, 

rather than more beneficial outreach to 

other borrowers who may be more likely 

to be able to fully repay. 

In assessing the costs of collection, 

the Department may also consider 

whether collection advances the 

principles of the title IV programs. For 

example, a key purpose of the title IV 

programs is to enable borrowers who 

pursue postsecondary education to 

improve their future economic 

outcomes,21 and it may be contrary to 


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intended to increase student access to a ‘‘highly 

skilled professional [and] technical’’ workplace 

evolving in the United States. Id. at 20. Further, 

after signing the HEA into law, President Lyndon 

Johnson remarked that, among other purposes, the 

Act intended to provide ‘‘a way to deeper personal 

fulfillment, greater personal productivity, and 

increased personal reward.’’ See Public Papers of 

the Presidents, Johnson 1965 book 2, at 1103–04. 

22See, e.g., 81 FR 75926 (Nov. 1, 2016) and 84 

FR 49788 (Sept. 23, 2019). 23See 20 U.S.C. 1087hh(2). 

this purpose to seek collection from 

borrowers who, due to labor market 

changes or family health challenges, are 

unable to participate fully in the market 

and repay their loans. 

Proposed § 30.91(a) would permit the 

Secretary to waive all or part of an 

outstanding loan balance. Waiving part, 

but not all, of the amount owed could 

alleviate a borrower’s inability to repay 

the remaining debt or alter the 

Department’s cost-benefit equation 

associated with collecting the loan. The 

proposed regulation would preserve the 

Secretary’s discretion to determine 

when it would be appropriate to provide 

such a partial waiver. 

The language in proposed § 30.91(a) 

should be understood in the context of 

the standards for relief described in the 

discussion of proposed § 30.91(c) and 

§ 30.91(d). If the Secretary determined 

that a borrower is eligible for relief 

under proposed § 30.91(a), the Secretary 

would next need to determine the 

amount of the outstanding balance to 

waive. To do so, the Secretary would 

assess the borrower’s hardship factors to 

determine whether it is likely that those 

hardship issues could be addressed by 

only waiving part of the balance rather 

than the full amount. Generally, the 

Department would adopt a rebuttable 

presumption that the full amount would 

be eligible for waiver where the 

borrower meets the criteria in this 

proposed section. Such a presumption 

could, however, be rebutted if the 

Secretary concludes that the effect of the 

hardship on the borrower would be 

ameliorated by less than a full waiver. 

The Department is proposing to use a 

presumption of a full waiver because we 

believe that full relief would be 

warranted in the majority of 

circumstances in which a waiver is 

granted under this standard, and 

because doing so would produce the 

most consistent decision-making. We 

reach this conclusion based upon past 

challenges in establishing 

methodologies for partial relief in other 

types of student loan forgiveness. For 

instance, the Department has struggled 

to address the issue of partial relief for 

years in the context of approved 

borrower defense to repayment 

discharges. Multiple borrower defense 

regulations have contemplated the 

award of partial discharges for 

borrowers.22 In those situations, the 

amount of relief was based upon the 

determined amount of financial harm 

faced by the borrower. The Department 

attempted to capture this through 

formulas that took into account typical 

borrower earnings compared to earnings 

at other comparable types of institutions 

and programs but encountered legal and 

methodological challenges with such 

approaches. In using such approaches, 

the Department struggled to make sure 

that the comparisons being drawn 

included the earnings of the borrower 

whose relief was being contemplated 

(for example, methodologies used the 

earnings of borrowers who graduated 

but there could be approved claims from 

non-graduates). The Department also 

could not determine that the 

experiences of the typical borrower 

matched those of the borrower in 

question. Ultimately, the Department 

adopted a rebuttable presumption of full 

relief for these discharges. 

Though the Department has not 

previously implemented the hardship 

waivers proposed in this NPRM, we 

believe such a process would result in 

similar issues were we to not use a 

rebuttable presumption of a full waiver. 

Similar to calculating financial harm for 

approved borrower defense claims, we 

would need to calculate an amount that 

would allow the borrower to repay the 

debt in full in a reasonable period or 

justify the government’s cost of 

collection based upon the expected 

benefits. Although a de minimis amount 

of debt might be predictably repaid, we 

have not been able to identify an 

implementable principle that would 

lead to consistent results for partial 

relief. 

Moreover, the Department would 

need to make these decisions 

consistently. We do not anticipate that 

waivers would be granted across a 

common group of borrowers who 

attended the same school and program 

the way they typically are for borrower 

defense claims. That means the 

approaches attempted in borrower 

defense, which draw comparisons to 

similar educational programs, would 

not work here. The Department would 

therefore need to use a fully 

individualized process to determine 

relief. That has risks of inconsistency, 

especially in situations where waivers 

are granted as part of an application 

approach in which there is a holistic 

assessment of the factors. Borrowers 

approved under such a process could 

have very different characteristics from 

each other, making it challenging to 

determine how such characteristics 

should be weighted for consistent 

waiver amount determinations. 

Overall, then, we believe a rebuttable 

presumption of a full waiver would 

facilitate the greatest consistency in 

decision-making. Here, a rebuttable 

presumption means that if the 

presumption of full relief were rebutted, 

only then would the Department 

conduct a more involved determination. 

And doing so in more isolated cases 

would allow the Department’s 

determinations to be more consistent 

and accurate. 

The committee reached consensus on 

this section. 

§ 30.91(b) Factors That Substantiate 

Hardship 

Statute: Section 432(a) of the HEA (20 

U.S.C. 1082(a)) provides that in the 

performance of, and with respect to, the 

functions, powers, and duties, vested in 

him by this part, the Secretary may 

enforce, pay, compromise, waive, or 

release any right, title, claim, lien, or 

demand, however acquired, including 

any equity or any right of redemption. 

Section 468(2) of the HEA endows the 

Secretary with similarly broad and 

flexible powers with respect to loans 

arising under the Perkins program.23

Current Regulations: None. 

Proposed Regulations: Proposed 

§ 30.91(b) provides a non-exhaustive list 

of factors related to the borrower that 

the Secretary may consider in 

determining whether a borrower meets 

the hardship standard for relief under 

these regulations. These factors are: 

• Household income; 

• Assets; 

• Type of loans and total debt 

balances owed for loans described in 

proposed 30.91(a), including those not 

owed to the Department; 

• Current repayment status and other 

repayment history information; 

• Student loan total debt balances 

and required payments, relative to 

household income; 

• Total debt balances and required 

payments, relative to household income; 

• Receipt of a Pell Grant and other 

information from the Free Application 

for Federal Student Aid (FAFSA) form; 

• Type and level of institution 

attended; 

• Typical student outcomes 

associated with a program or programs 

attended; 

• Whether the borrower has 

completed any postsecondary certificate 

or degree program for which the 

borrower received title IV, HEA 

financial assistance; 


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Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 87139 

24Looney, Adam and Constantine Yannelis. ‘‘A 

crisis in student loans?: How changes in the 

characteristics of borrowers and in the institutions 

they attended contributed to rising loan defaults.’’ 

Brookings Papers on Economic Activity 2015, no. 2 

(2015): 1–89. Gross, Jacob PK, Osman Cekic, Don 

Hossler, and Nick Hillman. ‘‘What Matters in 

Student Loan Default: A Review of the Research 

Literature.’’ Journal of Student Financial Aid 39, no. 

1 (2009): 19–29. 

25Takti-Laryea, Ama and Phillip Oliff. ‘‘Who 

Experiences Default?’’ Pew Charitable Trusts. 

March 1, 2024. https://www.pewtrusts.org/en/ 

research-and-analysis/data-visualizations/2024/ 

who-experiences-default. 

26 Ibid. 

27Scott-Clayton, Judith. ‘‘What accounts for gaps 

in student loan default, and what happens after.’’ 

(2018). Brookings. Mueller, Holger M. and 

Constantine Yannelis. ‘‘The rise in student loan 

defaults.’’ Journal of Financial Economics 131, no. 

1 (2019): 1–19. Mezza, Alvaro A. and Kamila 

Sommer. ’’ ‘‘A Trillion-Dollar Question: What 

Predicts Student Loan Delinquencies?.’’ Journal of 

Student Financial Aid 46, no. 3 (2016): 16–54. 

• Age; 

• Disability; 

• Age of the borrower’s loan based 

upon first disbursement, or the 

disbursement of loans repaid by a 

consolidation loan; 

• Receipt of means-tested public 

benefits; 

• High-cost burdens for essential 

expenses, such as healthcare, 

caretaking, and housing; 

• The extent to which hardship is 

likely to persist; and 

• Any other indicators of hardship 

identified by the Secretary. 

Reasons: The Department proposes 

this non-exhaustive list in proposed 

§ 30.91(b)(1) through (16) to identify the 

data likely to best substantiate whether 

a borrower would be eligible for relief. 

The Department proposes that the list be 

non-exhaustive, and further proposes a 

‘‘catch-all’’ provision in § 30.91(b)(17), 

to preserve the Department’s flexibility 

to address unanticipated factors that 

affect specific borrowers. Although the 

list in proposed § 30.91(b) is not 

exhaustive, we believe that providing 

this extensive list of the factors that 

would be most relevant to the 

Secretary’s determination provides 

appropriate notice and guidance as to 

what the Secretary would consider. 

We do not anticipate that the 

Secretary would need to evaluate every 

factor in proposed § 30.91(b) for a given 

borrower. Rather, these factors identify 

different items that could be considered, 

either individually or in concert with 

other factors in proposed § 30.91(b), to 

make determinations of whether the 

borrower is eligible for relief. There are 

some factors that, might be sufficient 

with only limited additional evidence to 

determine a borrower is eligible for 

relief. By contrast, there are other factors 

that are likely to serve as contributing 

factors, but that would likely require 

several more factors to sufficiently 

demonstrate that the borrower is eligible 

for relief. 

In an assessment of the borrower’s 

factors indicating hardship, whether 

under proposed § 30.91(c) or § 30.91(d), 

the Department anticipates that 

determining that a borrower is eligible 

for relief would be the result of 

considering multiple factors identified 

in proposed § 30.91(b) and the interplay 

between those factors, including looking 

at a combination of the borrower’s 

current financial circumstances and the 

history of their loan, to make the 

required determination of whether a 

borrower is eligible for relief. 

The factors listed in proposed 

§ 30.91(b) fall into several different 

groups, which in turn would inform 

how the factor could help demonstrate 

hardship. Below we discuss these 

groupings and how they could inform 

the Secretary’s determination of 

whether the borrower has experienced, 

or is experiencing, hardship that would 

qualify for relief. 

We note that the term ‘‘factors’’ is 

used in the title of proposed § 30.91(b) 

and ‘‘indicators’’ is used in the 

regulatory text of proposed § 30.91(b). 

The term ‘‘indicators’’ was intended to 

refer to factors that may indicate 

hardship. To avoid confusion with the 

use of the term ‘‘indicators’’ in 

statistical terminology, we use ‘‘factors’’ 

where possible. 

Borrower’s current and past finances 

(factors 1, 2, 3, 5, 6, 7, 14, and 15). One 

category of proposed factors relates to 

borrowers’ current finances. These are 

listed below with their corresponding 

number in proposed § 30.91(b): 

1. Household income; 

2. Assets; 

3. Type of loans and total debt 

balances owed for Federal student 

loans, including those not owed to the 

Department; 

5. Student loan total debt balances 

and required payments, relative to 

household income; 

6. Total debt balances and required 

payments, relative to household income; 

7. Receipt of a Pell Grant and other 

information from the Free Application 

for Federal Student Aid (FAFSA) form; 

14. Receipt of means-tested public 

benefits; and 

15. High-cost burdens for essential 

expenses, such as healthcare, 

caretaking, and housing. 

The Department proposes these 

factors because they would provide 

important information about a 

borrower’s financial situation. 

Information about household income 

and assets would help the Secretary 

understand the level of resources a 

borrower might have available to put 

toward their loans. 

The borrower’s household income 

also could be a relevant factor for 

evaluating their likelihood of default. 

Research has found a borrower’s 

earnings to be correlated with their 

likelihood of default,24 and a 2021 Pew 

survey indicated that borrowers who 

reported relatively low incomes or 

volatile incomes also reported 

substantially higher student loan default 

rates, as compared to borrowers who 

reported higher incomes or who 

reported stable earnings.25

Assets would be relevant to determine 

whether a borrower’s ability to repay a 

loan is impaired, because they are a 

component of a borrower’s finances that 

might be liquidated to allow repayment. 

They also might provide a financial 

cushion that would allow a borrower to 

avoid default in the event of a job loss 

or a large unplanned expense, such as 

medical expenses.26 Homeownership, 

for example—whether by the borrower 

or the borrower’s parents—appears to be 

correlated with lower likelihood of 

default.27 Homeowners can potentially 

obtain liquidity by borrowing against 

their home in times of need, and 

homeownership also correlates with 

other measures of creditworthiness and 

financial advantage. Because assets— 

particularly more liquid assets that can 

be tapped quickly in times of financial 

distress—might provide a valuable 

cushion against default, information on 

a borrower’s assets, such as savings and 

investments, would be relevant to the 

determination of whether the hardship 

standard in proposed § 30.91(a) is met. 

Similarly, the proposed factor related 

to receipt of means-tested public 

benefits could inform the Secretary if 

other government entities have 

determined that a borrower meets the 

qualifications for public assistance, 

which would streamline the Secretary’s 

evaluation process. 

Those data also could indicate 

hardship overall. Receipt of meanstested public benefits, such as through 

the Supplemental Nutrition Assistance 

Program (SNAP), Supplemental Security 

Income (SSI), or Temporary Assistance 

for Needy Families (TANF), indicates an 

individual or family is likely living at or 

near the Federal Poverty Level. 

Demonstrated eligibility for these 

programs could indicate that a borrower 

lacks additional funds to put toward 

repaying their student loan debt. 

Additionally, survey data indicate that 

borrowers who received public benefits 

were more likely to report not making 


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87140 Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 

28Blagg, Kristin. ‘‘The Demographics of IncomeDriven Student Loan Repayment.’’ February 26, 

2018. Urban Institute. https://www.urban.org/ 

urban-wire/demographics-income-driven-studentloan-repayment. Takti-Laryea, Ama and Phillip 

Oliff. ‘‘Who Experiences Default?’’ Pew Charitable 

Trusts. March 1, 2024. https://www.pewtrusts.org/ 

en/research-and-analysis/data-visualizations/2024/ 

who-experiences-default. 

29Mezza, Alvaro A. and Kamila Sommer. ‘‘A 

trillion dollar question: What predicts student loan 

delinquencies?’’ Finance and Economics Discussion 

Series 2015–098 (2015). Washington: Board of 

Governors of the Federal Reserve System. Looney, 

Adam and Constantine Yannelis. ‘‘A crisis in 

student loans?: How changes in the characteristics 

of borrowers and in the institutions they attended 

contributed to rising loan defaults.’’ Brookings 

Papers on Economic Activity 2015, no. 2 (2015): 1– 

89. 

30Scott-Clayton, Judith. ‘‘What accounts for gaps 

in student loan default, and what happens after.’’ 

(2018). Brookings. The EFC is no longer being used 

in financial aid calculations, starting with the 2024– 

2025 FAFSA form. Instead, there is a new index 

called the Student Aid Index (SAI) that will be 

used. While the EFC and SAI use different 

calculations, we expect the general evidence about 

EFC (e.g., that is correlated with default) to also be 

true for SAI. 

31 Ibid. Steiner, Matt and Natali Teszler. 

‘‘Multivariate Analysis of Student Loan Defaulters 

at Texas A&M University.’’ (2005) Texas 

Guaranteed Student Loan Corporation. Looney, 

Adam, and Constantine Yannelis. ‘‘A crisis in 

student loans?: How changes in the characteristics 

of borrowers and in the institutions they attended 

contributed to rising loan defaults.’’ Brookings 

Papers on Economic Activity 2015, no. 2 (2015): 1– 

89. Specifically, higher age at time of repayment is 

negatively associated with default, as is being a 

dependent. Borrowers who report a family income 

of under $25,000 on their first FAFSA are more 

likely to default. 

32U.S. Government Accountability Office. 

‘‘Social Security Offsets: Improvements to Program 

Design Could Better Assist Older Student Borrowers 

with Obtaining Permitted Relief.’’ December 2016. 33Blagg, Kristin and Victoria Lee. ‘‘The 

complexity of education debt among older 

Americans.’’ November 2017. Urban Institute. 

34 Di, Wenhua, Carla Fletcher, and Jeff Webster. 

‘‘A Rescue or a Trap? An Analysis of Parent PLUS 

Student Loans.’’ (2022). Federal Reserve Bank of 

Dallas. 

35See, for example, Scott-Clayton 2018, 

Appendix Table A2, where amount borrowed is 

associated parabolically with likelihood of default. 

36Looney, Adam, and Constantine Yannelis. 

‘‘How useful are default rates? Borrowers with large 

balances and student loan repayment.’’ Economics 

of Education Review 71 (2019): 135–145. Dynarski, 

Susan M. ‘‘An economist’s perspective on student 

loans in the United States.’’ Human Capital Policy 

(2021): 84–102. Edward Elgar Publishing. 

37 Ibid. 

38Scott-Clayton, Judith. ‘‘What accounts for gaps 

in student loan default, and what happens after.’’ 

(2018). Brookings. 

payments on their loans or having 

defaulted on a debt.28

Federal Pell Grants are awarded to 

students who demonstrate financial 

need. Information about Pell Grant 

receipt and other data from the FAFSA 

could provide helpful information about 

a borrower’s economic circumstances at 

the time they went to college, as well as 

their trajectory over the course of their 

enrollment in higher education, which 

could help give the Secretary a 

perspective on the duration of hardship 

that some borrowers face, and help the 

Secretary determine the likelihood that 

the hardship would continue. 

Researchers have found that receipt of 

a Pell Grant and the average amount of 

the Pell Grant (which is determined by 

a number of factors related to the 

borrower’s enrollment, expenses, and 

financial capacity) is correlated with 

difficulties repaying loans.29 Other 

evidence indicates that a borrower’s 

expected family contribution (EFC)—an 

index number that until recent 

legislative changes was used to 

determine eligibility for Federal student 

aid including Pell Grants using data on 

students’ income, assets, and other 

FAFSA inputs—is correlated with 

default on student loans within 12 

years.30

Other borrower experiences that are 

reflected in data reported on the FAFSA 

also can be associated with future 

student loan default, including parental 

education, borrower age, and 

dependency status.31

The other proposed factors in this 

group (paragraphs 3 through 6) would 

provide important context about the 

extent to which financial resources 

available to the borrower must be put 

toward other critical expenses. For 

instance, information about a borrower’s 

other debt obligations would give the 

Secretary a more in-depth picture of a 

borrower’s financial situation that 

would account for other debts, 

including non-Federal student loans, 

that are not otherwise known to the 

Department. That helps in 

understanding total debt burden and 

how much of a borrower’s income goes 

to debt repayment. 

The type of student debt that 

borrowers hold, and the amount of that 

debt, can be predictive of the likelihood 

of being in default. For example, to 

receive a Grad PLUS or Parent PLUS 

loan, a borrower must not have an 

adverse credit history. This check for 

adverse credit history, along with likely 

differences among parents, graduate 

students, and undergraduate students, is 

likely to generate a pool of borrowers 

with different characteristics than 

borrowers who receive other types of 

Federal loans. Parent PLUS and Grad 

PLUS borrowers typically borrow at 

older ages, at which point many will 

have more established careers. Parent 

PLUS loans have lower rates of default 

than Federal loans issued directly to 

students. For example, in fiscal year 

2015, among borrowers aged 50 to 64 

who hold Parent PLUS loans, 10 percent 

were in default, while borrowers in the 

same age group who held Federal loans 

for their own education had a default 

rate of 35 percent.32 Many older 

borrowers who take out Federal loans 

for their own education, however, have 

held their loans for a long time and are 

likely to have experienced repayment 

struggles.33 An examination of data 

about those who borrowed FFEL loans 

to attend institutions of all types in 

Texas and who entered repayment 

between 2004 and 2010 indicates that 

Parent PLUS borrowers had higher 

repayment rates than student borrowers 

during this period, although Parent 

PLUS borrowers who borrowed for their 

children to attend Minority-Serving 

Institutions (MSIs) paid down less debt 

and were more likely to default than 

borrowers for children who attended 

other institutions.34

Total student loan balance has been 

shown to correlate with default, though 

the link between total student loan 

balances and default can vary across 

borrowers.35 A borrower’s outstanding 

balance, and the type of loans for which 

they were eligible, can be broadly 

correlated with other factors that could 

affect a borrower’s ability to repay, such 

as level of education, whether the 

borrower completed education, and the 

borrower’s dependency status. Federal 

student loan borrowers with higher 

balances tend to be less likely to enter 

default; more than half of borrowers in 

default as of 2015 owed less than 

$10,000.36 This may be because many 

borrowers with relatively high balances 

used loans to attend graduate school, 

which can often lead to higher earnings. 

Others could be parents who are 

borrowing to help pay for a child’s 

education.37 Because both balance 

amount and debt type may be correlated 

with a borrower’s potential for 

experiencing default, these factors 

would be relevant for the Secretary to 

consider in determining whether a 

borrower is eligible for relief. 

In addition to debt by itself, payments 

and the amount of debt relative to a 

borrower’s income, such as their 

required monthly payments relative to 

monthly income, are correlated with an 

increased likelihood of default. For 

example, among a cohort of borrowers 

who first entered post-secondary 

education in 2003–04, higher debt-toincome ratios were associated with 

higher rates of default.38 Other data 

show that among bachelor’s degree 

recipients who left school in 1993, those 

with a monthly payment that was more 

than 12 percent of their monthly income 

were more likely to default by 2003 than 

those with debt payments that were a 


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39Choy, Susan P. and Xiaojie Li. ‘‘Dealing with 

Debt: 1992–93 Bachelor’s Degree Recipients 10 

Years Later. Postsecondary Education Descriptive 

Analysis Report.’’ (2006) NCES 2006–156. 

40Mezza, Alvaro A. and Kamila Sommer. ‘‘A 

trillion dollar question: What predicts student loan 

delinquencies?’’ Finance and Economics Discussion 

Series 2015–098 (2015). Washington: Board of 

Governors of the Federal Reserve System. Blagg, 

Kristin. ‘‘Underwater on Student Debt: 

Understanding Consumer Credit and Student Loan 

Default.’’ (2018). Urban Institute. Fuster, Andreas 

and Paul S. Willen. ‘‘Payment size, negative equity, 

and mortgage default.’’ American Economic Journal: 

Economic Policy 9, no. 4 (2017): 167–191. 

41For example, see Li, Wenli. ‘‘The economics of 

student loan borrowing and repayment.’’ Business 

Review Q3 (2013): 1–10. Federal Reserve Bank of 

Philadelphia. Ionescu, Felicia and Marius Ionsecu. 

‘‘The Interplay Between Student Loans and Credit 

Card Debt: Implications for Default in the Great 

Recession.’’ Federal Reserve Bank Finance and 

Economics Discussion Series: 2014–14 (2014). 

42See, e.g., 31 CFR 902.2(g). 

43Pew Charitable Trusts. ‘‘Borrowers Discuss the 

Challenges of Student Loan Repayment.’’ (2020). 

44 Iuliano, Jason. ‘‘An Empirical Assessment of 

Student Loan Discharges and the Undue Hardship 

Standard,’’ American Bankruptcy Law Journal 86, 

no. 3 (Summer 2012): 495–526. 

45Cohn, Jason. ‘‘Student Loan Default Patterns: 

What Different Paths through Default Can Tell Us 

about Equitably Supporting Borrowers.’’ (November 

2022). Urban Institute. 

46Monarrez, Toma ́s, and Dubravka Ritter. 

‘‘Resetting Wallets: Survey Evidence on Household 

Budget Adjustments with Student Loan Payments 

Resumption.’’ (2024): 1–19. 

47The Department recognizes that a borrower’s 

documented repayment history could also be 

affected by servicer recordkeeping, access to 

complete payment history, right to alternative 

payment arrangement, loan forgiveness, 

cancellation, or discharge. Separate and apart from 

these proposed regulations, the Department has 

taken steps to address these issues such as through 

the payment count adjustment. Moreover, even 

with these possible limitations, the Department 

believes that it is still useful to include this factor 

because repayment history can still provide 

valuable information about a borrower’s hardship. 

48Federal Student Aid, U.S. Department of 

Education. ‘‘Standard Repayment Plan.’’ https://

studentaid.gov/manage-loans/repayment/plans/ 

standard. 

49U.S. Department of Education, National Center 

for Education Statistics, Beginning Postsecondary 

Students: 1996/2001 (BPS). https://nces.ed.gov/ 

datalab/powerstats/table/nsqptw. 

lower share of income.39 It is possible 

that these trends may be different in 

recent years due to the growth in usage 

of IDR plans. However, because analyses 

like this rely on surveys that follow the 

repayment histories of borrowers over a 

long-time horizon, these currently 

represent the best evidence available to 

the Department about longer-term 

repayment experiences. 

A borrower’s debt obligations beyond 

student loan debt can affect financial 

stability, with research and data from a 

variety of settings indicating that the 

types of debts that borrowers hold, their 

payments, and the ratio of total debt to 

income, may be predictive of default.40

In addition, in the presence of financial 

distress, debtors may need to prioritize 

other payments instead of their student 

loans in an effort to preserve liquidity 

or avoid losing the home or auto that 

serves as collateral on other debt.41

The proposed factor in § 30.91(b)(15), 

related to high costs of other essential 

expenses, also captures a key concept 

that is not directly considered in other 

Department forms of repayment 

assistance. Formulas for income-driven 

repayment plans, for example, only 

focus on household size, income, and an 

amount of income protected based upon 

a multiplier of the Federal Poverty 

Level. The Department continues to 

believe that is the best approach for 

administering income-driven repayment 

obligations, as it is a simpler way to 

determine a payment obligation. 

However, that approach does not 

account for situations where borrowers 

face exceptionally high costs that are 

not otherwise factored in. During 

negotiated rulemaking, the Department 

heard from a borrower who is 

expending significant resources caring 

for a sick relative. In cases where the 

borrower is the only individual able to 

bear those costs on behalf of the relative, 

those costs may reduce the amount of 

income available for making payments 

on Federal student loans and are an 

expense that could not reasonably be 

adjusted or anticipated by the borrower. 

Agencies engaged in collection activity 

often consider the borrower’s overall 

expenses and whether such expenses 

are necessary or excessive.42 Specifying 

that the Secretary may consider highcost burdens for essential expenses in 

the hardship determination would allow 

the Secretary to address particularly 

concerning situations that could impair 

the borrower’s ability to fully repay 

their loan or heighten the costs of 

enforcing the full debt to a point that 

such enforcement is not justified. 

Among those who experienced 

student loan default, the time and 

financial burden of caring for young or 

medically needy family members is 

mentioned as a reason for missing 

student loan payments.43 Among 

borrowers who pursued discharge of 

their student debt through bankruptcy 

proceedings, those who were a caretaker 

for family members who have health or 

medical conditions were more likely to 

be successful than borrowers who 

pursued bankruptcy proceedings, but 

who did not have that same family 

need.44 Evidence also suggests that 

having medical collections is associated 

with student loan repayment 

struggles.45

For some borrowers, student loan 

payments make up a large portion of a 

household’s overall budget. As 

payments restarted in October 2023 

following the end of the payment pause, 

borrowers—particularly those with non- 

$0 scheduled payments—anticipated 

making changes to their household 

budget, such as reducing discretionary 

spending or savings.46 Therefore, 

essential expenses and duties would be 

relevant to the Secretary’s determination 

of whether a borrower meets the 

hardship standard in proposed 

§ 30.91(a). 

Experience repaying student loans 

(factors 4 and 13). Another category of 

proposed factors relates to information 

about the borrower’s experience 

repaying student loans. These factors 

are: 

4. Current repayment status and other 

repayment history information; and 

13. Age of the borrower’s loan based 

upon first disbursement, or the 

disbursement of loans repaid by a 

consolidation loan. 

The Department proposes considering 

these two factors because they provide 

information about what is already 

known about the ability of the borrower 

to repay their debt. Repayment history 

could indicate if the borrower has 

previously experienced struggles 

repaying their debt.47 Similarly, the age 

of loans would provide information 

about how long a borrower has held 

these debts. The longer a loan is 

outstanding without being repaid, the 

greater the concern about its eventual 

repayment. This is particularly true for 

loans that are well past the 10-year 

repayment period that is part of the 

Standard Repayment Plan.48 For 

example, in a sample of students who 

first entered postsecondary education in 

1995–1996 and have not borrowed since 

the 1999–2000 school year, the average 

borrower who had debt 20 years after 

entering school still owed 95 percent of 

what they initially borrowed, and the 

median borrower owed 69 percent.49

The Department has detailed 

information on the repayment histories 

of borrowers who first entered 

repayment on their student loans prior 

to the pandemic-related pause on 

student loan repayment. For borrowers 

who newly entered repayment when 

student loan payments restarted in 

October 2023, the Department will have 

at least six months of repayment history. 

In the Department’s experience, 

repayment status and other information 

relevant to a borrower’s loan history, 

including the borrower’s ability to 

access payment options under Title IV 

of the HEA, can be a strong predictor of 

student loan default. Borrowers who 

default often stay in default for a long 


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87142 Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 

50Miller, Ben. ‘‘Who Are Student Loan 

Defaulters?’’ (2017). Center for American Progress. 

51Campbell, Colleen, and Nicholas Hillman. ‘‘A 

Closer Look at the Trillion: Borrowing, Repayment, 

and Default at Iowa’s Community Colleges.’’ 

Association of Community College Trustees (2015). 

52 Gross, Jacob PK, Osman Cekic, Don Hossler, 

and Nick Hillman. ‘‘What Matters in Student Loan 

Default: A Review of the Research Literature.’’ 

Journal of Student Financial Aid 39, no. 1 (2009): 

19–29. 

53 Ibid. 

54Tamborini, Christopher R., ChangHwan Kim, 

and Arthur Sakamoto. ‘‘Education and lifetime 

earnings in the United States.’’ Demography 52, no. 

4 (2015): 1383–1407. 

55See, e.g., 20 U.S.C. 1087(a)(1) (authorizing the 

Department to cancel or discharge FFEL loans due 

to total and permanent disability), 20 U.S.C. 

1087a(b)(2) (Direct loans), and 20 U.S.C. 

1087dd(c)(1)(F)(ii) (Perkins loans). 

56 20 U.S.C. 1087(a)(1). 

57Andara, Kennedy, Anona Neal, and Rose 

Khattar. ‘‘Disabled Workers Saw Record 

Employment Gains in 2023, But Gaps Remain.’’ 

(2024). Center for American Progress. 

time and those who have a history of 

delinquency or previous defaults may 

be more likely to default again. 

Whether a borrower postpones 

payments through deferment or 

forbearance could also be predictive of 

student loan default, though the diverse 

bases for these postponement periods 

means that their predictive power is 

context-dependent. For example, some 

borrowers use a deferment for 

additional school enrollment or military 

service, while others may seek a 

deferment due to economic hardship. In 

one study, the median defaulter among 

those who first entered postsecondary 

education in 2003–04 and experienced 

default within 12 years used two 

forbearances.50 However, in another 

study, roughly 43 percent of a cohort of 

borrowers who entered repayment in 

fiscal year 2011 and attended 

community colleges in one State did not 

make a payment, or postpone their 

payments using deferment or 

forbearance, before their loans entered 

default.51

The Department acknowledges that 

the inclusion of factors related to a 

borrower’s repayment history could 

create a perception that borrowers could 

intentionally change their repayment 

behavior to improve their chances of 

receiving a waiver. However, as 

described below, the Department 

believes that the plan for considering 

waivers would not encourage large 

numbers of borrowers to act in such a 

strategic manner. With respect to the 

relief under proposed § 30.91(c), the 

Department proposes using the 

publication date of the NPRM as the 

start of the two-year period in which a 

borrower may be predicted to default. 

This would prevent borrowers from 

trying to artificially establish hardship 

through strategic nonpayment; likewise, 

it prevents granting relief to any such 

borrowers. Failure to pay carries 

substantial risks to borrowers. Since 

there is no guarantee that they would 

receive any relief under this proposed 

rule, failure to pay would negatively 

impact credit scores, and risk wage 

garnishment or the loss of loan benefits. 

Overall, we believe using data from the 

publication date of the NPRM would 

negate the ability for borrowers to game 

the hardship model. 

With respect to the relief proposed 

under § 30.91(d), the Department would 

also take measures that prevent strategic 

maneuvers to qualify for waiver. First, 

as part of the holistic assessment, the 

Department would consider a multitude 

of factors that interact with each other. 

Therefore, borrower attempts to adjust 

behavior and qualify under that 

provision could result in a borrower 

hurting themselves through delinquency 

or default with no guarantee of a waiver. 

Second, solely being in delinquency or 

default is no guarantee that a borrower’s 

application would be approved. Third, 

as part of the holistic assessment, the 

Department would consider anomalous 

changes in repayment behavior—such 

as a borrower suddenly showing signs of 

struggle when other borrower 

conditions appear favorable for 

repayment. Overall, we believe the 

negative borrower consequences of 

delinquency and default, combined 

with a multi-factor eligibility 

assessment that is not limited to such 

status, would discourage intentional 

nonrepayment of loans. 

Borrower’s personal attributes (factors 

11 and 12). Another category of factors 

relates to additional information about a 

borrower’s personal attributes. These 

are: 

11. Age; and 

12. Disability. 

The Department proposes including 

these factors because they can provide 

additional information about the ability 

of the borrower to repay their loans, the 

likely amount the Department might be 

able to collect from a borrower, and the 

associated costs of enforced collections. 

Considering a borrower’s age can help 

inform the likelihood that their financial 

position is going to improve, deteriorate, 

or stay the same. This is especially true 

when used in concert with other factors. 

For instance, elderly borrowers are 

highly unlikely to see their income 

increase and are instead more likely to 

see their income diminish as they stop 

working. Relatedly, information on a 

borrower’s disability could indicate 

whether their earnings are affected, 

which could help the Secretary 

understand the resources they may or 

may not have available to repay their 

loans. Disability information may also 

indicate that the borrower faces 

additional expenses that subtract from 

what a borrower could pay on their 

loans. For many people, earnings grow 

as they age and gain more experience; 

however, many older borrowers have 

held their loans for a long time and may 

have experienced repayment 

struggles.52 Older borrowers may also be 

more likely to have financial 

commitments (such as expenses for 

children or caring for others) that can 

result in difficulty making student loan 

payments.53 Earnings also tend to peak 

for workers in their mid-fifties, and so 

borrowers who hold loans until and 

beyond this age may see their ability to 

pay plateau or erode if their expenses 

are consistent but their income 

declines.54

Borrowers are eligible for a discharge 

of their student loans if they qualify for 

a total and permanent disability (TPD) 

discharge.55 To qualify for a TPD 

discharge, the Secretary must determine 

that a borrower is ‘‘unable to engage in 

any substantial gainful activity by 

reason of any medically determinable 

physical or mental impairment that can 

be expected to result in death, has lasted 

for a continuous period of not less than 

60 months, or can be expected to last for 

a continuous period of not less than 60 

months.’’ 56 With the proposed hardship 

waivers, the Secretary would be looking 

at situations where a borrower’s 

disability may impair the extent to 

which they can work without rising to 

the level that would justify a TPD 

discharge. For example, the Department 

may consider, as one of several factors, 

whether a disability that limits a 

borrower’s ability to work full-time for 

a sustained period, but does not 

completely preclude part-time work, 

increases the likelihood of default, and 

indicates hardship impairing the likely 

ability to fully repay the loan, even if 

that borrower would not qualify for a 

TPD discharge. Although employment 

rates for people with disabilities have 

increased since the COVID–19 

pandemic, working-age individuals with 

disabilities have employment rates that 

are roughly half of their counterparts 

without disabilities.57 Moreover, the 

medical costs that may be associated 

with treatment for a substantial 

disability or disabilities may make it 

more difficult to make student loan 

payments. Among borrowers who have 

successfully been granted a student loan 

discharge in bankruptcy and have a 

medical problem or a dependent 

medical problem, a work-limiting 


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Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 87143 

58 Iuliano, Jason. ‘‘An Empirical Assessment of 

Student Loan Discharges and the Undue Hardship 

Standard,’’ American Bankruptcy Law Journal 86, 

no. 3 (Summer 2012): 495–526. 

59Campbell, Colleen. ‘‘The Forgotten Faces of 

Student Loan Default.’’ (2018). Center for American 

Progress. Specifically, 60 percent of borrowers with 

emotional or psychiatric condition, 40 percent of 

those with orthopedic or mobility impairment, and 

37 percent of those with a health impairment or 

problem experienced a default within 12 years, 

relative to 28 percent of those without a disability. 

60Takti-Laryea, Ama and Phillip Oliff. ‘‘Who 

Experiences Default?’’ Pew Charitable Trusts. 

March 1, 2024. https://www.pewtrusts.org/en/ 

research-and-analysis/data-visualizations/2024/ 

who-experiences-default. 

61See, for example, Black, Dan A. & Smith, Jeffrey 

A. (2006). Estimating the Returns to College Quality 

with Multiple Proxies for Quality. Journal of labor 

Economics 24.3: 701–728. Cohodes, Sarah R. & 

Goodman, Joshua S. (2014). Merit Aid, College 

Quality, and College Completion: Massachusetts’ 

Adams Scholarship as an In-Kind Subsidy. 

American Economic Journal: Applied Economics 

6.4: 251–285. Andrews, Rodney J., Li, Jing & 

Lovenheim, Michael F. (2016). Quantile treatment 

effects of college quality on earnings. Journal of 

Human Resources 51.1: 200–238. Dillon, Eleanor 

Wiske & Smith, Jeffrey Andrew (2020). The 

Consequences of Academic Match Between 

Students and Colleges. Journal of Human Resources 

55.3: 767–808. Further discussion is included in 

Federal Register Vol. 88, No. 194. 

62Mezza, Alvaro A. and Kamila Sommer. ‘‘A 

trillion dollar question: What predicts student loan 

delinquencies?.’’ Finance and Economics 

Discussion Series 2015–098 (2015). Washington: 

Board of Governors of the Federal Reserve System.; 

Looney, Adam and Constantine Yannelis. ‘‘A crisis 

in student loans?: How changes in the 

characteristics of borrowers and in the institutions 

they attended contributed to rising loan defaults.’’ 

Brookings Papers on Economic Activity 2015, no. 

2 (2015): 1–89.; Armona, Luis, Rajashri Chakrabarti, 

and Michael F. Lovenheim. ‘‘Student debt and 

default: The role of for-profit colleges.’’ Journal of 

Financial Economics 144, no. 1 (2022): 67–92.; 

Deming, David J., Claudia Goldin, and Lawrence F. 

Katz. ‘‘The for-profit postsecondary school sector: 

Nimble critters or agile predators?.’’ Journal of 

Economic Perspectives 26, no. 1 (2012): 139–164. 

63Scott-Clayton, Judith. ‘‘What accounts for gaps 

in student loan default, and what happens after.’’ 

(2018). Brookings. 64Mezza, Alvaro A. and Kamila Sommer. ‘‘A 

trillion dollar question: What predicts student loan 

delinquencies?’’ Finance and Economics Discussion 

Series 2015–098 (2015). Washington: Board of 

Governors of the Federal Reserve System.; Looney, 

Adam and Constantine Yannelis. ‘‘A crisis in 

student loans?: How changes in the characteristics 

of borrowers and in the institutions they attended 

contributed to rising loan defaults.’’ Brookings 

Papers on Economic Activity 2015, no. 2 (2015): 1– 

89. 

65Looney, Adam and Constantine Yannelis. ‘‘A 

crisis in student loans?: How changes in the 

characteristics of borrowers and in the institutions 

they attended contributed to rising loan defaults.’’ 

Brookings Papers on Economic Activity 2015, no. 

2 (2015): 1–89. 66Mezza, Alvaro A. and Kamila Sommer. ‘‘A 

trillion dollar question: What predicts student loan 

delinquencies?’’ Finance and Economics Discussion 

Series 2015–098 (2015). Washington: Board of 

Governors of the Federal Reserve System. 

67Webber, Douglas A. ‘‘The lifetime earnings 

premia of different majors: Correcting for selection 

based on cognitive, noncognitive, and unobserved 

factors.’’ Labour economics 28 (2014): 14–23.; 

Andrews, Rodney J., Scott A. Imberman, Michael F. 

Lovenheim, and Kevin M. Stange. ‘‘The returns to 

college major choice: Average and distributional 

effects, career trajectories, and earnings variability.’’ 

No. w30331. National Bureau of Economic 

Research, 2022. 

68Cellini, Stephanie Riegg, and Nicholas Turner. 

‘‘Gainfully employed? Assessing the employment 

and earnings of for-profit college students using 

administrative data.’’ Journal of Human Resources, 

59(3) (2019): 342–371.; Christensen, Cody and 

Lesley J. Turner. ‘‘Student Outcomes at Community 

Colleges: What Factors Explain Variation in Loan 

Repayment and Earnings?’’ Brookings Institution 

(2021). 

69 Gross, Jacob PK, Osman Cekic, Don Hossler, 

and Nick Hillman. ‘‘What Matters in Student Loan 

Default: A Review of the Research Literature.’’ 

Journal of Student Financial Aid 39, no. 1 (2009): 

19–29.; Mezza, Alvaro A. and Kamila Sommer. ‘‘A 

trillion dollar question: What predicts student loan 

delinquencies?’’ Finance and Economics Discussion 

Series 2015–098 (2015). Washington: Board of 

Governors of the Federal Reserve System.; Looney, 

Adam and Constantine Yannelis. ‘‘A crisis in 

student loans?: How changes in the characteristics 

of borrowers and in the institutions they attended 

contributed to rising loan defaults.’’ Brookings 

Papers on Economic Activity 2015, no. 2 (2015): 1– 

89. Scott-Clayton, Judith. ‘‘What accounts for gaps 

in student loan default, and what happens after.’’ 

(2018). Brookings. 

70Lockwood, Jacob and Webber, Douglas, NonCompletion, Student Debt, and Financial WellBeing: Evidence from the Survey of Household 

Economics and Decisionmaking (August, 2023). 

FEDS Notes No. 2023–08–21. 

medical condition was relatively 

common.58

Data and surveys indicate that 

borrowers with a disability tend to have 

a higher probability of default, with 

variation across conditions.59 Half of 

borrowers who reported a disability in 

a 2021 Pew survey were in default, 

compared to a third of those without a 

disability.60

Borrower’s postsecondary experiences 

(factors 8, 9, and 10). The final group of 

factors are those related to a borrower’s 

postsecondary educational experience. 

Those factors are: 

8. Type and level of institution 

attended; 

9. Typical student outcomes 

associated with a program or programs 

attended; and 

10. Whether the borrower has 

completed any postsecondary certificate 

or degree program for which the 

borrower received title IV, HEA 

financial assistance. 

The Department proposes to include 

these factors because there are clear 

connections between student outcomes 

and the type of institution attended.61

Similarly, there are very strong 

correlations between non-completion of 

a certificate or degree program and 

struggles repaying student loans, as 

described further below. This 

information could be particularly 

helpful for determining whether a 

borrower may be at heightened risk of 

default, which might indicate that the 

borrower satisfies the hardship standard 

in proposed § 30.91(a). 

The level of education pursued, and 

the type of institution attended, can 

have a substantial impact on a student’s 

earning trajectory and on their 

propensity to default and propensity to 

experience hardship as defined in 

proposed § 30.91(a). Across multiple 

studies and datasets, the sector and 

level of education provided by the 

institution correlate with propensity to 

default. In particular, students who 

attended for-profit institutions are more 

likely to default.62 For example, among 

a cohort of borrowers who first entered 

undergraduate education in 2003–04, 

borrowers who entered a for-profit 

institution were 10 percentage points 

more likely to default than those who 

enrolled at other types of institutions.63

Further, students enrolled in two-year 

schools, or vocational schools, were 

more likely to default relative to 

students enrolled in four-year 

institutions.64 And students who enroll 

in non-selective four-year institutions 

were more likely to default than those 

who enroll in selective four-year 

institutions.65

The Department has long used a CDR 

measure to assess an institution’s 

continued participation in title IV aid 

programs. An institution’s CDR is highly 

predictive of future student loan 

delinquency.66

Research also has shown that there 

can be differential financial returns to 

programs of study.67 Certain programs 

are also more likely to produce 

graduates with high amounts of debt, 

relative to typical earnings, which may 

affect loan repayment outcomes.68

While the prevalence of loan default 

among borrowers who attended a 

particular institution or program is not 

a direct measure of academic quality, it 

can provide insight into whether the 

financial returns provided by a program 

or institution are sufficient for 

borrowers. 

While not independently 

determinative of hardship, whether a 

borrower has completed their program 

of study generally correlates with 

student loan delinquency and default.69

Borrowers who leave school without the 

credential they were pursuing have debt 

but lack the additional earnings 

premium that can come with attaining 

a degree or certificate. Students who 

leave school without completing their 

degree are less likely to report financial 

well-being and are more likely to 

express a desire to have done things 

differently in their higher education 

experience.70 These factors are relevant 


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87144 Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 

71See 20 U.S.C. 1087hh(2). 

72Li, Wenli. ‘‘The economics of student loan 

borrowing and repayment.’’ 2013. Business Review, 

Federal Reserve Bank of Philadelphia, issue Q3, 

pages 1–10. Takti-Laryea, Ama and Phillip Oliff. 

‘‘Who Experiences Default?’’ Pew Charitable Trusts. 

March 1, 2024. https://www.pewtrusts.org/en/ 

research-and-analysis/data-visualizations/2024/ 

who-experiences-default. 73Federal Student Aid, U.S. Department of 

Education. ’’ Student Loan Delinquency and 

Default.’’ https://studentaid.gov/manage-loans/ 

default. 

74Although the Secretary would consider the risk 

of default as a circumstance indicating the borrower 

is likely suffering hardship in repaying the loan, the 

statutory consequences of default remain unaffected 

by the regulation. Borrowers who enter default 

would remain subject to these consequences, while 

other borrowers may demonstrate a high risk of 

default indicating hardship, and therefore justifying 

a waiver, regardless of whether they have ever 

entered default on their loans. 

75 ‘‘Hardship’’ is defined as ‘‘Privation; suffering 

or adversity.’’ Black’s Law Dictionary (12th ed. 

2024). 

to the Secretary’s determination of 

whether the borrower is experiencing or 

has experienced hardship that meets the 

eligibility requirements. 

Other factors (factors 16 and 17). In 

addition to the proposed factors 

discussed above, the Department 

proposes to include § 30.91(b)(16) to 

capture whether a borrower’s hardship 

is likely to persist. This information 

could help inform decisions about the 

amount of a potential waiver, as 

hardships that are likely to persist 

would counsel in favor of either larger 

or complete waivers. In addition, and as 

described more fully below, under 

proposed § 30.91(d), the Department’s 

holistic assessment would consider the 

persistence of the borrower’s hardship 

as part of the determination whether the 

borrower met the eligibility 

requirements of showing a high 

likelihood to be in default or experience 

similarly severe negative and persistent 

circumstances, and other options for 

payment relief would not sufficiently 

address the borrower’s persistent 

hardship. 

Finally, proposed § 30.91(b)(17) 

would be a catch-all provision. As 

already noted, it would be important to 

acknowledge that rare unanticipated 

circumstances may cause a borrower to 

experience hardship that satisfies the 

standard for relief. 

The Secretary’s consideration of 

factors indicating hardship. Using the 

factors in proposed § 30.91(b), under 

both a predictive assessment of the 

factors (under proposed § 30.91(c)) and 

a holistic assessment of the factors 

(under proposed § 30.91(d)), the 

Secretary would engage in a factspecific analysis of individual 

borrowers to determine whether the 

facts indicate that a borrower is facing 

hardship that meets the eligibility 

requirements. 

The committee reached consensus on 

this section. 

§ 30.91(c) Immediate Relief for 

Borrowers Likely To Default 

Statute: Section 432(a) of the HEA (20 

U.S.C. 1082(a)) provides that in the 

performance of, and with respect to, the 

functions, powers, and duties, vested in 

him by this part, the Secretary may 

enforce, pay, compromise, waive, or 

release any right, title, claim, lien, or 

demand, however acquired, including 

any equity or any right of redemption. 

Section 468(2) of the HEA endows the 

Secretary with similarly broad and 

flexible powers with respect to loans 

arising under the Perkins program.71

Current Regulations: None. 

Proposed Regulations: Proposed 

§ 30.91(c) would specify the Secretary’s 

discretionary authority to provide for 

immediate, one-time relief to borrowers 

who are likely to default on their 

student loan obligations. Specifically, 

should the Secretary choose to exercise 

such discretion, the Secretary would be 

able to consider the factors in proposed 

§ 30.91(b) to waive all or part of the 

federally held student loans of 

borrowers who the Secretary 

determines, based on data in the 

Secretary’s possession, have 

experienced or are experiencing 

hardship such that their loans are at 

least 80 percent likely to be in default 

in the next two years after these 

proposed regulations are published. 

Reasons: Proposed § 30.91(c) provides 

that the Secretary may discharge loans 

for borrowers who would likely be in 

default within two years of the 

publication date of this proposed 

regulation. The Department proposes 

specifying the Secretary’s authority to 

grant relief for borrowers at a high risk 

of defaulting because we are concerned 

about borrower hardship caused by 

default and its effects. The Department 

proposes a statistical model, discussed 

in more detail below, that describes the 

weighting of the factors in proposed 

§ 30.91(b) that would predict which 

borrowers are likely to be in default 

within the two-year period and 

therefore meet the hardship standard in 

proposed § 30.91(a). 

As previously described, a borrower’s 

default status can be indicative of the 

borrower’s hardship repaying the 

loan.72 Department data show that 

borrowers who default on their student 

loans tend to be individuals who are 

lower income, are the first in their 

families to attend college, have lower 

amounts of loan debt and yet still 

struggle with repayment, and did not 

complete their postsecondary programs. 

Importantly, using likelihood of being 

in default as an indicator of hardship 

draws an explicit connection between a 

borrower’s financial circumstances and 

their ability to repay the loan. Default 

indicates that a borrower has already 

faced hardship impairing their ability to 

fully repay the loan, and default itself 

typically creates cascading 

consequences that would further impair 

the ability to pay.73 When a borrower 

defaults, their entire loan balance is 

accelerated, potentially leading to wage 

garnishment and offset of Federal tax 

refunds and benefits such as Social 

Security.74 Default is also reported to 

consumer reporting agencies, likely 

reducing borrowers’ credit scores, and 

impeding them from obtaining credit or 

securing employment. Injury to 

borrowers’ credit history and scores 

from default may also affect borrowers’ 

ability to obtain housing, often 

disqualifying them from mortgages and 

affecting the ability to rent property. 

Finally, default may render borrowers 

ineligible for additional title IV, HEA 

assistance, which may be needed to 

complete an unfinished education. 

Therefore, defaults can compound the 

burdens of existing loans by preventing 

the economic boost of a completed 

education necessary to repay the debt. 

For all the reasons described above, the 

relief under proposed § 30.91(c) is 

consistent with the exacting definition 

of ‘‘hardship,’’ 75 because default is 

typically a result of significant 

economic privation (such as income 

insufficient to meet expenses, resulting 

in an inability to meet basic needs) and 

is a cause of further privation. 

Using a predictive assessment of the 

factors in proposed § 30.91(b) to grant 

immediate relief to borrowers likely to 

be in default also would serve important 

practical purposes. This approach 

would allow the Department to assess 

likely default based on information it 

already has, without soliciting 

additional information from borrowers 

or other sources. The Department would 

be able to assess borrower data that 

correlate with student loan default, and 

therefore predict which borrowers are 

likely to experience default within the 

two-year period. This includes the 

factors in proposed § 30.91(b) that 

correlate with default rates, such as 

borrowers’ current repayment status and 

other repayment history, noncompletion of a postsecondary program, 

low-income levels shown on a FAFSA, 

receipt of a Pell Grant, and attendance 

at a particular type and level of 

institution. 


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76See https://studentaid.gov/announcementsevents/default-fresh-start. 

77See for example, Ganong, Peter and Jeffrey B. 

Liebman. ‘‘The decline, rebound, and further rise in 

SNAP enrollment: Disentangling business cycle 

fluctuations and policy changes.’’ American 

Economic Journal: Economic Policy 10 (4) (2018): 

153–176. 

If the Secretary exercises discretion 

under proposed § 30.91(c), the 

Secretary’s grant of waivers under 

proposed § 30.91(c) would be a one-time 

action. The Department anticipates that 

shortly after finalizing and 

implementing these regulations, the 

Department could identify borrowers 

who would be eligible for waivers under 

proposed § 30.91(c) based on data as of 

the publication of the NPRM, and then 

would expeditiously choose whether to 

exercise discretion to provide such 

relief as part of a one-time action. 

The waivers under proposed 

§ 30.91(c) would be one-time actions for 

two reasons. The Department has taken 

significant steps to reduce the 

likelihood of default in the future, such 

as giving borrowers a pathway to return 

defaulted loans to repayment status 

through the Fresh Start program.76

Therefore, the Department anticipates 

that in the future fewer borrowers will 

be likely to default. Second, the relief 

available through proposed § 30.91(d), 

by submitting an application that would 

be reviewed on a holistic basis, would 

provide a pathway to relief going 

forward for borrowers who continue to 

experience hardship even with the 

measures described above. However, the 

proposed one-time relief in proposed 

§ 30.91(c) would remain necessary to 

many borrowers who have had loans for 

years without access to such benefits. 

These borrowers may already have 

struggled with delinquency and default 

and may be more likely to have already 

experienced challenges with application 

processes in the past.77 Providing relief 

to such borrowers, without requiring 

them to take additional steps, reduces 

the cost to borrowers to gain access to 

eligible relief, and potentially reduces 

the administrative costs to government. 

The Department proposes to limit this 

waiver provision to borrowers who are 

highly likely to be in default in the near 

term. Therefore, proposed § 30.91(c) 

would provide a waiver only to 

borrowers who the Secretary determines 

have an ‘‘80 percent’’ or higher 

likelihood of being in default within 

two years after these proposed 

regulations are published. In 

determining the proper threshold to 

propose for this provision, the 

Department believes it is important to 

propose a likelihood of being in default 

greater than 50 percent. A number lower 

than 50 percent would not be 

appropriate because it would imply that 

a borrower was more likely to not be in 

default than they were to be in default, 

and therefore materially less likely to be 

experiencing hardship that would 

impair their ability to fully repay their 

loans. We ultimately decided to propose 

an 80 percent threshold to distinguish a 

pool of borrowers with a distinctly 

higher risk of default, as measured by 

the factors in proposed § 30.91(b). Our 

goal in choosing a proposed threshold 

for this provision is to identify clusters 

of borrowers in the probability 

distribution who are highly likely to be 

in default within two years. Under the 

Department’s proposed modeling of the 

likelihood that a borrower is in default 

within the next two years, which is 

described below, there is a significant 

group of borrowers with minimal 

predicted risk of being in default and 

another significant group of borrowers 

with a relatively high predicted risk of 

being in default. The difference between 

the number of borrowers who are 80 

percent likely to be in default and those 

with somewhat lower likelihood of 

being in default, such as 60 percent or 

70 percent, is minimal, but the 

Department nonetheless proposes 80 

percent because it reasonably identifies 

borrowers who are most at risk for 

default. However, as the Department 

continues to obtain newly available 

repayment data through the publication 

of this NPRM—and particularly data 

after the payment pause ended—the 

Department would continue to 

incorporate such data into the model. 

As such, we seek feedback from the 

public about whether the Department 

should adjust the proposed 80 percent 

threshold, as well as feedback on 

whether there are other reasons to adjust 

the 80 percent threshold and the related 

justification. 

Because we have taken steps to 

address default going forward, the 

Department proposes using the 

likelihood of being in default within 

two years of the publication date of the 

NPRM, as the Department is intent on 

providing relief to borrowers who are 

likely to experience hardship in the near 

term. We believe two years would be 

reasonable, since it is a relatively short 

time period that would also reflect the 

possible time it might take for a 

borrower to default if they began 

repayment or were current at the start of 

the observation window. Generally, a 

borrower is not treated as being in 

default on their loan until they are 270 

days late on payments, with additional 

days added for the transfer of the loan 

to the Debt Management and Collections 

System (DMCS). Were the Department 

to consider borrowers who are likely to 

be in default within a shorter period, 

many borrowers experiencing hardship 

would be excluded because they could 

not be in default within that timeframe. 

For example, were we to only consider 

borrowers likely to be in default within 

12 months, then any borrower with 

fewer than two missed payments could 

not default within that window. A twoyear observation window also would 

allow us to capture borrowers who may 

be using deferment or forbearance to 

postpone loan repayment due to 

economic hardship. For example, a 

borrower who used a 12-month 

postponement at the start of the 

observation window may still default 

within the second year. We believe 

using the proposed statistical model 

described below to identify borrowers 

who are highly likely to default within 

two years would be reasonable because 

these are borrowers who the Department 

can reasonably predict have 

experienced or are experiencing 

hardship that impairs their ability to 

fully repay their loans. 

As noted above, we recognize that a 

model designed to predict the 

likelihood of being in default in the 

future might lead some to argue that 

borrowers would be able to qualify for 

a waiver by intentionally not repaying 

their loans, thereby increasing their risk 

of being in default. However, we believe 

this risk is minimal in this instance. 

First and foremost, as noted above, we 

are proposing that at the time of the 

final rule, we would use data as of the 

publication of these proposed rules. 

Since these regulations would identify 

borrowers eligible for relief using data 

as of the NPRM’s publication to predict 

future outcomes, and since we 

anticipate that the Secretary’s 

discretionary grant of waivers under 

proposed § 30.91(c) would be a one-time 

action, borrowers would have limited 

opportunity to change their likelihood 

of relief by strategically not paying and 

would have no opportunity after this 

NPRM is published. Even if a later date 

were chosen, trying to avoid payment to 

artificially indicate repayment struggles 

would be a significant risk on the part 

of borrowers because the issuance of 

any particular waiver is discretionary 

and is based on the consideration of 

multiple factors. Therefore, any 

borrower who intentionally fails to 

repay loans to try to qualify for a waiver 

may end up harming their credit and 

facing the consequences of delinquency 

or default with no guarantee of receiving 

a waiver. Second, the Department’s 

analysis considers the experience of 


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78 Gradient boosted trees are a machine learning 

approach commonly used for prediction based on 

decision trees. Decision trees use a ‘‘tree-like’’ 

hierarchical structure to split the data at various 

points in the distribution of predictor variable 

values, with the goal of predicting the value of the 

target variable (in this application, default within 

two years). Boosted trees typically perform better 

than single decision trees or random forest methods 

by sequentially learning from many decision trees. 

See Hastie, Tibshirani, and Friedman (2009), The 

Elements of Statistical Learning: Data Mining, 

Inference, and Prediction. 2nd Edition. 

79See for example, Albanesi, Stefania and 

Domonkos F. Vamossy. ‘‘Predicting Consumer 

Default: A Deeper Learning Approach.’’ NBER 

Working Paper 26165 (2019). Khandani, Amir E., 

borrowers across the entire student loan 

portfolio. As such, even if an individual 

borrower exhibits signs of delinquency, 

that borrower may still not be identified 

as sufficiently likely to be in default if 

most similarly situated borrowers are 

not predicted to be in default. 

To assess the proposed hardship 

standard in § 30.91(a) when granting 

relief under proposed § 30.91(c), the 

Department proposes to use a statistical 

model that would predict likelihood of 

being in default within two years. The 

model would guide how the Secretary 

would consider and weigh data 

associated with the factors identified in 

proposed § 30.91(b) that are accessible 

to the Secretary without the need for 

additional data collection. 

This proposed model would be 

designed to predict default on a Federal 

student loan in any quarter for two years 

from the date these proposed 

regulations are published. Student loan 

default would be estimated by a series 

of ‘‘predictors,’’ a term that we use to 

refer to the data elements that serve as 

inputs into the model, which would 

correspond to the 17 factors identified 

in proposed § 30.91(b). In Table 1 

below, we include a list of the 

explanatory predictors that we propose 

to consider based on data currently 

available to the Department. We 

describe the proposed process for 

designing and refining the prediction 

model that incorporates the factors from 

proposed § 30.91(b) in further detail 

below. 

As noted, the Department would 

derive these predictors from several data 

sources available to the Department. 

Some of the data would come from 

individual records available in the 

National Student Loan Data System 

(NSLDS), such as repayment histories 

and loan debt outstanding. Other data 

would be derived from information 

provided on the borrower’s FAFSA, 

such as Adjusted Gross Income or 

parental education. Some data would be 

compiled based on multiple sources 

held within the Department, such as 

data on the programs for which students 

borrowed and data that are reported on 

the College Scorecard or in cohort 

default rate reports that indicate typical 

student outcomes associated with a 

program or programs attended. 

TABLE 1—PROPOSED MODEL INPUTS

(‘‘PREDICTORS’’) 

Past and Present Repayment Statuses. 

Total amount of debt outstanding. 

Past and present types of loans held, and 

amounts borrowed. 

Year of loan disbursement. 

TABLE 1—PROPOSED MODEL INPUTS

(‘‘PREDICTORS’’)—Continued 

Ratio of current loan balance to balances 

from 4 months prior. 

Repayment plans in which borrower currently 

participates. 

Payments made on student loans. 

Scheduled payments on student loans. 

Interest rate on loans. 

Years in repayment. 

Pell Grant receipt. 

Adjusted Gross Income from the borrowers’ 

first FAFSA. 

Expected Family Contribution calculated from 

inputs on the FAFSA. 

Parent education level reported on the 

FAFSA. 

Dependent/independent status. 

Borrower age. 

Highest academic level reported for the borrower’s loans. 

Highest degree the borrower ever reported 

pursuing. 

Graduation indicator. 

Year of graduation, for those graduated. 

Predominant degree of the school the student last attended or from which they last 

graduated. 

Ownership type of the school the student last 

attended or from which they last graduated. 

Cohort default rates of the school the student 

last attended or from which they last graduated. 

Earnings and debt information from College 

Scorecard of the school the student last attended or from which they last graduated. 

Note: The Department proposes to use loan 

repayment statuses that reflect the benefits 

provided by On Ramp and Fresh Start 

policies. 

The proposed process for designing 

and refining the statistical model to 

determine which borrowers meet the 

hardship standard in proposed 

§ 30.91(a) based on 80 percent 

likelihood of being in default (as 

described in proposed § 30.91(c)) within 

two years would be as follows. First, the 

Department would develop and validate 

the model using multiple two-year 

random samples of data on Departmentheld loans with data ranging from 2017 

to February 2020. The Department 

proposes to use samples from this time 

period because it contains the most 

recent period of at least two years of 

uninterrupted repayment before the 

COVID–19 payment pause, and 

therefore should provide the most up to 

date predictions about the relationship 

between the predictors described above 

and observed default over a two-year 

period. We would use these data to 

estimate the extent to which the 

previously described explanatory 

predictors (displayed in Table 1) would 

predict whether a borrower was likely to 

be in default on a student loan in any 

quarter within two years and therefore 

would meet the hardship standard in 

proposed § 30.91(a). 

The Department would then evaluate 

a variety of methods to include the 

‘‘predictors’’ in the proposed model to 

create the most accurate predictions of 

likelihood of being in default. There are 

generally two forms that predictors can 

take in the source data. The first form 

is continuous, which means that the 

predictor can be any value within a 

range. For example, the amount of 

outstanding debt that a borrower has 

could take on dollar values from greater 

than 0 to the maximum amount of 

outstanding debt in our data. The 

second form is categorical, which are 

predictors that have a finite number of 

distinct groups (e.g., type of higher 

education institution). We propose to 

scale continuous predictors by their 

means and standard deviations, but 

would also consider those same 

predictors without scaling, and as 

categorical variables defined with 

different types of cutoff values to create 

those categories. The Department would 

also consider additional statistical 

model specifications such as those that 

include interactions among individual 

predictors, the use of higher order 

polynomials, and those that generate 

estimates using different subgroups of 

the model. Among these approaches to 

including variables in the model, the 

Department would estimate the model 

using logistic regression as well as 

machine learning approaches, such as 

gradient boosted trees.78

Next, to select the proposed model 

from among various potential 

specifications and options, we would 

evaluate the performance of the model 

using a distinct random hold out test 

sample of Department-held loans from 

the same time period as the training 

sample. In this step, to evaluate the 

performance of the model, we would 

calculate commonly used metrics, 

including measures of model fit, 

confusion matrices with a variety of 

threshold levels, standard metrics 

derived from the confusion matrices, 

and other performance metrics.79


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Adlar J. Kim, and Andrew W. Lo. ‘‘Consumer 

Credit-Risk Models Via Machine-Learning 

Algorithms.’’ Journal of Banking and Finance, 

34(2010): 2767–2787. Hastie, Trevor, Robert 

Tibshirani, and Jerome Friedman. The Elements of 

Statistical Learning: Data Mining, Inference, and 

Prediction. 2nd Edition (2009). 80See 20 U.S.C. 1087hh(2). 

81The Department recognizes that the relief in 

proposed § 30.91(d) would include a determination 

that other payment relief options are not sufficient, 

but the relief under proposed § 30.91(c) would not 

include such a determination. The Department does 

not think such a determination is necessary for the 

relief under proposed § 30.91(c) because eligible 

borrowers under that provision may have spent 

years or decades without access to other IDR plans, 

such as PAYE and REPAYE, and did not benefit 

from strengthened loan servicer accountability 

under the new USDS contracts. This determination 

also would not be needed under proposed § 30.91(c) 

because borrowers would have little to no ability to 

influence the results under proposed § 30.91(c) with 

strategic non-payment. 

Generally, these measures provide 

different ways of comparing observed 

outcomes to outcomes predicted by the 

model, and a model would be 

considered to perform better if it more 

accurately classified borrowers into 

those who will be in default and those 

who will not be in default. 

The proposed assessment based on 

this model would produce a score for 

each borrower that accumulates the 

prediction related to the predictors 

included in the model for likelihood of 

being in default within two years. The 

scores would range from 0 percent to 

100 percent. This score could be 

interpreted as an estimate of the 

probability that a borrower is in default 

within the next two years. We would 

use the score from the model to assist 

with identifying borrowers who were at 

least 80 percent likely to be in default 

on a student loan in any quarter within 

two years of the proposed regulations’ 

publication date. 

Once the regulations are finalized and 

implemented, this model would be used 

to conduct an individualized 

determination of whether each borrower 

fits within the hardship standard in 

proposed § 30.91(a) and therefore 

qualifies for a waiver under proposed 

§ 30.91(c). 

For purposes of this NPRM, we 

estimated which borrowers would have 

an 80 percent likelihood of being in 

default within the applicable two-year 

period using a 5 percent sample of 

Department-held loans as of April 2024. 

At the time of the publication of the 

NPRM, however, the Department will 

have access to additional data that could 

be used to refine the model. For 

example, in the data used for modeling 

in this NPRM, the Department has 

recent borrower repayment history only 

for about five months since the end of 

the payment pause. At the time of the 

publication of the NPRM, however, the 

Department will be able to observe 

recent repayment and engagement 

experiences over a longer time horizon 

through the date of the NPRM. 

The Department proposes to measure 

this two-year window as of the 

publication date of the NPRM to 

preclude strategic behavior to increase 

the likelihood of receiving hardship 

relief by defaulting on loans. The reason 

for measuring the two-year window as 

of the publication date of the NPRM is 

because we are intent on providing 

relief as soon as possible once the 

NPRM is finalized, and because we are 

concerned that a longer period between 

finalizing the regulations and measuring 

the two-year window could create 

incentives for borrowers to attempt to 

strategically adjust their repayment 

behavior to be more likely to obtain a 

waiver. 

The committee reached consensus on 

this regulatory provision. 

§ 30.91(d) Process for Additional Relief 

Statute: Section 432(a) of the HEA (20 

U.S.C. 1082(a)) provides that in the 

performance of, and with respect to, the 

functions, powers, and duties, vested in 

him by this part, the Secretary may 

enforce, pay, compromise, waive, or 

release any right, title, claim, lien, or 

demand, however acquired, including 

any equity or any right of redemption. 

Section 468(2) of the HEA endows the 

Secretary with similarly broad and 

flexible powers with respect to loans 

arising under the Perkins program.80

Current Regulations: None. 

Proposed Regulations: Proposed 

§ 30.91(d) provides that the Secretary 

may rely on data in the Secretary’s 

possession that may have been acquired 

through an application or any other 

means to provide relief, including 

automated relief, based on criteria 

demonstrating that the borrower has 

experienced or is experiencing 

hardship. 

Reasons: Proposed § 30.91(d) would 

clarify the procedures the Department 

could use to provide relief if the 

Secretary were to exercise the discretion 

under this section to issue waivers. 

The pathway for discretionary relief 

under proposed § 30.91(d) is for the 

Secretary to assess a borrower’s 

circumstances in a holistic manner, 

which may be based in part on an 

application submitted by the borrower, 

to determine if the borrower is 

experiencing or has experienced 

hardship. Proposed § 30.91(d) operates 

fully independently and separately from 

proposed § 30.91(c) and would therefore 

be fully severable. 

The Department intends the 

‘‘hardship’’ necessary to trigger relief 

under proposed § 30.91(d) to be a 

substantial harm. The Department 

interprets the hardship required for 

relief under proposed § 30.91(d) as: the 

borrower must be highly likely to be in 

default or experience similarly severe 

negative and persistent circumstances, 

and other options for payment relief 

would not sufficiently address the 

borrower’s persistent hardship. The 

requirement that other payment relief 

options would not sufficiently address a 

borrower’s persistent hardship would 

apply both to borrowers who meet the 

standard because the Department finds 

they are highly likely to be in default 

and to borrowers who meet the standard 

because the Department finds they are 

highly likely to experience similarly 

severe negative and persistent 

circumstances. 

Default is one of the strongest 

indications that a borrower has not been 

able to use options available to avoid 

hardship in repaying their student 

loans, so the Department would use a 

standard related to default as one part 

of the hardship test for individual 

applicants under proposed § 30.91(d). 

In addition, the Department would 

also have to determine that other 

options for payment relief under the 

HEA, including IDR plans and other 

forgiveness opportunities, are not 

sufficient for the borrower to avoid a 

high likelihood of being in default or 

similarly severe and persistent negative 

circumstances.81 To determine whether 

the borrower faces a persistent hardship, 

the Department would consider the 

factors described in proposed § 30.91(b). 

The Department makes student loans 

to students with the expectation that 

they will be repaid according to the 

terms provided under the HEA and laid 

out in the Master Promissory note. The 

Department understands that many 

borrowers experience difficulty 

repaying their loans at some point in 

their repayment experience that 

necessitates relief from monthly 

payments calculated under the standard 

10-year repayment plan. As discussed 

above, there are many options under the 

HEA available to borrowers who may 

experience difficulty repaying their 

loans. Relief options include the shortterm use of deferment or forbearance 

options. These proposed regulations are 

not designed to supplant any of the 

options available to borrowers. Rather, 

these proposed regulations are designed 

as a safety valve for those borrowers 

who cannot receive sufficient relief to 

avoid hardship via payment relief 

options already in existence under the 


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82A payment relief option would only be 

available to a borrower if they satisfied the 

applicable statutory and regulatory requirements. 

HEA. For the purposes of proposed 

§ 30.91(d), the Department would 

consider the availability of the following 

payment relief options 82 to determine 

whether such options could sufficiently 

address the borrower’s hardship: 

deferment or forbearance; forgiveness 

opportunities such as borrower defense 

discharge and TPD discharge, and 

income-driven repayment (IDR) plans. 

A payment relief option would not be 

sufficient if it would not prevent the 

borrower from still experiencing a 

hardship related to the loan that makes 

them highly likely to be in default or 

experience similarly severe negative and 

persistent circumstances that 

substantially impairs their ability to 

fully repay the loan. For example, a 

borrower that is on an IDR plan with a 

$0 monthly payment might still be 

eligible for a waiver if the borrower 

would still be highly likely to 

experience similarly severe negative and 

persistent circumstances because they 

have a persistent hardship and lack the 

disposable income needed to fully repay 

the loan without jeopardizing their basic 

financial security over an extended 

period of time. In other words, the 

Department could determine that a 

payment relief option was not sufficient 

if it only temporarily delayed—but did 

not eliminate—the need to discharge 

some or all of the borrower’s loans to 

sufficiently address the hardship. 

The Department seeks to provide 

relief for individuals who are 

experiencing hardship without creating 

incentives for borrowers to strategically 

choose to cease making payments in 

order to qualify for relief. Proposed 

§ 30.91(c) would prevent this strategic 

behavior by specifying the Secretary’s 

discretion to provide one-time 

immediate relief based on a predictive 

assessment that would use the 

publication date of this NPRM as the 

beginning of the two-year period. There 

would be no future opportunity to 

change behavior and to obtain relief 

under proposed § 30.91(c). 

For proposed § 30.91(d), the 

Department would address the risk of 

strategic behavior with a two-fold 

requirement that the borrower must be 

highly likely to be in default, or 

experience similarly severe negative and 

persistent circumstances, and that other 

options for payment relief would not 

sufficiently address the borrower’s 

persistent hardship, including IDR 

plans, for those eligible. As a result, a 

borrower who is experiencing a high 

likelihood of being in default that they 

could avoid by enrolling in an IDR plan 

but has chosen not to enroll as an 

attempt at strategic behavior, would be 

extremely unlikely to receive relief 

under proposed § 30.91(d). In cases 

where a borrower who could find 

sufficient relief from hardship through 

an IDR plan applies for relief under 

proposed § 30.91(d), the Department 

would encourage that borrower to enroll 

in IDR, and that borrower would be 

unlikely to be eligible for a waiver 

under proposed § 30.91(d). Nor would a 

borrower who faces default simply 

because they have chosen not to make 

payments, without any evidence of 

experiencing hardship, receive relief 

under proposed § 30.91(d). These 

requirements would advance the goal of 

the proposed regulations and apply the 

standard of proposed § 30.91(a), 

providing relief in cases of genuine 

hardship. 

Moreover, should the Secretary 

choose to exercise authority under these 

regulations, proposed § 30.91(c) would 

provide relief to the millions of 

borrowers who are experiencing 

hardship already, and in many cases 

who have lacked access to the full range 

of repayment options that will now be 

fully available going forward. Relief 

would only be available to individuals 

under proposed § 30.91(d) who 

experience hardship that is not 

sufficiently addressed by other options 

for payment relief and have a high 

likelihood of being in default or 

experiencing similarly severe negative 

and persistent circumstances. 

One type of borrower eligible for relief 

under proposed § 30.91(d) would be a 

borrower who is already enrolled in an 

IDR plan but who is highly likely to 

default or experience similarly severe 

negative and persistent circumstances 

even with an IDR plan’s payment 

protections. Although IDR plans take 

into account income and household 

size, there are borrowers who would 

still experience hardship related to their 

loans that could not be remedied 

through other means. Consistent with 

the factors described in § 30.91(b), the 

Secretary could consider, for example, 

whether an individual has unusually 

high expenses (such as nondiscretionary 

medical or housing expenses) such that 

they are highly likely to be in default, 

or to experience similarly severe 

negative and persistent circumstances. 

In general, to determine whether an 

individual has such high expenses, the 

Department would look to established 

benchmarks, such as the Department of 

Housing and Urban Development 

measures of a ‘‘rent burdened’’ or 

‘‘severely rent burdened’’ household 

that pays rent m 30 or 50 percent of 

household income, respectively, or the 

Internal Revenue Code standard 

allowing for deduction of health 

expenses in excess of 7.5 percent of 

Adjusted Gross Income. The Department 

would consider these expenses in the 

context of the borrower’s overall 

financial resources, including income, 

assets, and debt. 

As an example, consider an 

individual who is earning $80,000 a 

year, has $35,000 in loans, few assets, 

three dependents, and a monthly 

payment obligation of approximately 

$277 a month under an income-based 

repayment plan. That obligation would 

not ordinarily lead to hardship. 

However, in this example, the 

individual lives in a high-rent area and 

pays the typical rent of $2,300 for a onebedroom apartment (more than 30 

percent of their income or ‘‘rent 

burdened’’ under the HUD standard) 

and has a dependent that requires 

medication and treatment for a chronic 

health condition that costs $1,600 per 

month (well in excess of 7.5 percent of 

AGI). In order to pay for these expenses 

in addition to other essentials, like food 

and transportation, the borrower is in 

default or is on the verge of being in 

default after missing seven months of 

payments. If this borrower demonstrated 

that they did not have the assets to 

avoid being in default, and that their 

circumstances were unlikely to improve 

within a period of time, then they could 

potentially receive relief under this 

provision. 

There may also be cases where an 

individual can demonstrate hardship 

even in the absence of a payment 

burden (such as when a borrower has a 

$0 IDR payment). For example, a 

borrower may be able to show that they 

meet the standard for hardship 

described above if they can show that, 

even with a $0 IDR payment, the 

existence of the debt itself causes the 

required hardship. As stated above, a 

borrower on an IDR plan with a $0 

monthly payment may also be able to 

show that they are still highly likely to 

experience similarly severe negative and 

persistent circumstances because they 

have a persistent hardship and lack the 

disposable income needed to fully repay 

the loan without jeopardizing their basic 

financial security over an extended 

period of time. The Department has also 

included a directed question regarding 

the circumstances in which this might 

occur. 

Relief under proposed § 30.91(d), 

whether based on data ‘‘acquired 

through an application or by any other 

means’’ would be assessed on a holistic 

basis to determine whether the standard 

described above for proposed § 30.91(d) 


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83The Department recognizes that determining 

eligibility for relief under proposed § 30.91(c) relies 

on data already in the Department’s possession. 

However, as explained elsewhere, proposed 

§ 30.91(c) and proposed § 30.91(d) are designed to 

address different challenges and accordingly have 

different eligibility criteria as described in this 

NPRM. Proposed § 30.91(c) is designed to provide, 

at the Secretary’s discretion, immediate relief on a 

one-time basis to address the hardship of borrowers 

who may have spent years or decades without 

access to other IDR plans, such as PAYE and 

REPAYE, and did not benefit from strengthened 

loan servicer accountability under the new USDS 

contracts. By contrast, proposed § 30.91(d) is meant 

to provide ongoing relief to borrowers on a goingforward basis even after the Department has 

implemented various improvements to assist with 

student loan repayment, such as the 

implementation of IDR plans and updated servicer 

contracts. The Department believes that in most 

instances, additional information would be 

necessary for the Department to conduct a holistic 

assessment to determine whether the borrower 

meets the specific standard for relief under 

proposed § 30.91(d). 

is met.83 The Department interprets the 

word ‘‘automated’’ as used in proposed 

§ 30.91(d) to mean relief that the 

Secretary may grant based on 

information already in the Department’s 

possession rather than acquired through 

an application. The Department 

anticipates that the number of borrowers 

for whom the Department would 

possess sufficient information to 

conduct the holistic review without data 

acquired from an application would be 

small. The Secretary would not be able 

to use a default risk model such as a 

model similar to the one described in 

§ 30.91(c) in order to provide relief 

under proposed § 30.91(d). A borrower 

could only receive a waiver without an 

application under proposed § 30.91(d) if 

the Department’s holistic review of the 

borrower’s data satisfied the same 

stringent standard that the Department 

would apply for application-based 

relief. Such cases would be considered 

rare since the data that the Department 

possesses would have to sufficiently 

establish eligibility including that other 

options for payment relief would not 

sufficiently address the borrower’s 

persistent hardship and would also 

need to sufficiently distinguish such 

borrowers from otherwise similar 

borrowers who would not be deemed to 

qualify for relief. 

The Department recognizes that to 

meet this stringent standard, the 

Department would need data that would 

allow the Secretary to determine 

whether a borrower meets proposed 

§ 30.91(d)’s standard. The Department 

notes that the Secretary would need to 

expand or refine data elements in the 

future to provide relief to borrowers 

under proposed § 30.91(d) without an 

application because, at the time of 

preparing this NPRM, the Department 

does not currently have sufficient data 

available to determine whether a 

borrower meets the eligibility standard. 

We seek feedback from the public about 

the type of data that could be used for 

relief without an application under 

proposed § 30.91(d), and how those data 

could be obtained. 

As discussed throughout this NPRM 

including in the Regulatory Impact 

Analysis, the proposed process under 

§ 30.91(d) would likely involve detailed 

reviews of applications submitted by 

borrowers or other data already in the 

Department’s possession. We anticipate 

that the processes under § 30.91(d) 

would take time to implement following 

the publication of a final rule, including 

developing an application, producing 

clarifying guidance, and hiring and 

training staff. Given the administrative 

costs associated with this process, we 

also anticipate that the volume of 

applications the Department would be 

able to process would be low at first and 

would be dependent on the amount of 

funding received by FSA through the 

annual appropriations process. 

Therefore, depending on the number of 

applications, it would take time for the 

Department to make waiver 

determinations on a borrower’s 

individual application, and the 

Department would not be in position to 

guarantee a response within a specific 

period. As a result, borrowers should 

anticipate continuing to make payments 

while their application is pending. 

The committee reached consensus on 

this section. 

Regulatory Impact Analysis 

Executive Orders 12866 (as Modified by 

14094) and 13563 

Under Executive Order 12866, the 

Office of Management and Budget 

(OMB) must determine whether this 

regulatory action is ‘‘significant’’ and, 

therefore, subject to the requirements of 

the Executive Order and subject to 

review by OMB. Section 3(f) of 

Executive Order 12866, as amended by 

Executive Order 14094, defines a 

‘‘significant regulatory action’’ as an 

action likely to result in a rule that 

may— 

(1) Have an annual effect on the 

economy of $200 million or more 

(adjusted every 3 years by the 

Administrator of OIRA for changes in 

gross domestic product), or adversely 

affect in a material way the economy, a 

sector of the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local, 

territorial, or Tribal governments or 

communities; 

(2) Create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; 

(3) Materially alter the budgetary 

impacts of entitlements, grants, user 

fees, or loan programs or the rights and 

obligations of recipients thereof; or 

(4) Raise legal or policy issues for 

which centralized review would 

meaningfully further the President’s 

priorities, or the principles stated in the 

Executive Order, as specifically 

authorized in a timely manner by the 

Administrator of OIRA in each case. 

This proposed regulatory action 

would have an annual effect on the 

economy of $200 million or more. Table 

4.1 in this regulatory impact analysis 

(RIA) provides an estimate of the net 

budget effects of each provision of these 

proposed regulations. We also provide 

estimates of the administrative costs for 

these provisions. Because the net budget 

effect is larger than $200 million a year, 

this proposed regulatory action is 

subject to review by OMB under section 

3(f) of Executive Order 12866 (as 

amended by Executive Order 14094). 

Notwithstanding this determination, we 

have assessed the potential costs and 

benefits, both quantitative and 

qualitative, of this proposed regulatory 

action and have determined that the 

benefits would justify the costs. 

We have also reviewed these 

regulations under Executive Order 

13563, which supplements and 

explicitly reaffirms the principles, 

structures, and definitions governing 

regulatory review established in 

Executive Order 12866. To the extent 

permitted by law, Executive Order 

13563 requires that an agency— 

(1) Propose or adopt regulations only 

on a reasoned determination that their 

benefits justify their costs (recognizing 

that some benefits and costs are difficult 

to quantify); 

(2) Tailor its regulations to impose the 

least burden on society, consistent with 

obtaining regulatory objectives and 

considering—among other things and to 

the extent practicable—the costs of 

cumulative regulations; 

(3) In choosing among alternative 

regulatory approaches, select those 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety, 

and other advantages; distributive 

impacts; and equity); 

(4) To the extent feasible, specify 

performance objectives, rather than the 

behavior or manner of compliance a 

regulated entity must adopt; and 

(5) Identify and assess available 

alternatives to direct regulation, 

including economic incentives—such as 

user fees or marketable permits—to 


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encourage the desired behavior, or 

provide information that enables the 

public to make choices. 

Executive Order 13563 also requires 

an agency ‘‘to use the best available 

techniques to quantify anticipated 

present and future benefits and costs as 

accurately as possible.’’ The Office of 

Information and Regulatory Affairs of 

OMB has emphasized that these 

techniques may include ‘‘identifying 

changing future compliance costs that 

might result from technological 

innovation or anticipated behavioral 

changes.’’ 

We are issuing these proposed 

regulations upon on a reasoned 

determination that their benefits would 

justify their costs. In choosing among 

alternative regulatory approaches, we 

selected those approaches that, in the 

Department’s estimation, best balance 

the size of the estimated transfer and 

qualitative benefits and costs. Based on 

the analysis that follows, the 

Department believes that these proposed 

regulations are consistent with the 

principles in Executive Order 13563. 

We have also determined that this 

regulatory action would not unduly 

interfere with State, local, territorial, 

and Tribal governments in the exercise 

of their governmental functions. 

As described in OMB Circular A–4, 

we compare the proposed regulations to 

the current regulations. In this 

regulatory impact analysis, we discuss 

the need for regulatory action, the 

summary of key proposed provisions, 

potential costs and benefits, net budget 

impacts, and the regulatory alternatives 

we considered. 

Elsewhere in this section under the 

Paperwork Reduction Act of 1995, we 

identify and explain burdens 

specifically associated with information 

collection requirements. 

1. Congressional Review Act 

Designation 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), the Office of 

Information and Regulatory Affairs 

designated that these regulations are 

covered under 5 U.S.C. 804(2) and (3). 

2. Need for Regulatory Action 

These proposed regulations describe 

circumstances in which the Secretary 

might exercise the longstanding 

discretionary waiver authority under 

sections 432(a)(6) and 468(2) of the HEA 

to waive all or part of a Federal student 

loan held by the Department to provide 

relief to a borrower who has 

experienced or is experiencing 

hardship. 

Addressing the issue of hardship is 

critical in building a strong student loan 

program. While the Department 

currently offers a number of options for 

payment relief, including IDR plans and 

forgiveness opportunities, the 

complexity of borrowers’ lives may lead 

to hardships that are not sufficiently 

addressed by these existing options 

such that these hardships are likely to 

impair their ability to repay a Federal 

loan in full or cause the anticipated 

costs of collecting the loan to exceed the 

likely benefits of continued collection of 

the entire debt. The Department 

frequently hears from borrowers about a 

range of these situations, such as 

borrowers facing significant unexpected 

expenses caring for loved ones with 

chronic illnesses, living with disabilities 

that limit but do not eliminate work 

opportunities, dealing with financially 

burdensome medical bills, or fearing 

that they will struggle to repay loans as 

they prepare to exit the workforce by 

retiring. 

Sections 432(a)(6) and 468(2) of the 

HEA provide the Secretary with 

discretion to address these situations. 

Issuing a clear regulatory framework to 

address hardship would better inform 

the public about how the Secretary 

might exercise this waiver authority by 

considering a set of factors and 

standards that would allow for the 

consistent treatment of similarly 

situated borrowers, while also 

recognizing the inherent variability of 

each borrower’s particular situation. 

As further explained in the preamble, 

these proposed regulations specify two 

different pathways by which the 

Secretary may exercise discretion to 

grant relief to borrowers experiencing 

hardship: a pathway for immediate 

relief using a ‘‘predictive assessment’’ 

(proposed § 30.91(c)) and a separate 

pathway for additional relief based on a 

‘‘holistic assessment’’ of information 

submitted by the borrower through an 

application or acquired by any other 

means (proposed § 30.91(d)). 

For the immediate relief described in 

proposed § 30.91(c), the Secretary 

proposes to assess whether the borrower 

meets the hardship standard by 

determining whether a borrower has at 

least an 80 percent chance of being in 

default within two years, using a 

predictive assessment based on data 

already in the Department’s possession 

to analyze the hardship factors in 

proposed § 30.91(b). The use of a 

predictive assessment would allow the 

Department to recognize situations in 

which similarly situated borrowers face 

comparable challenges likely to impair 

their ability to fully repay the loan, or 

that would cause the costs of collecting 

the loan to outweigh the benefits. 

Further, this predictive assessment 

under proposed § 30.91(c) would be 

based on data in the Department’s 

possession and therefore would promote 

efficiency and reduce administrative 

costs. For example, the predictive 

assessment would promote efficiency 

because it would eliminate the need for 

individual borrowers to complete 

applications and for the Department to 

process those applications. 

Furthermore, using this predictive 

assessment would also avoid the risk 

that many borrowers in need of relief 

would miss out on the opportunity for 

relief because they are unaware of the 

need to apply or be unable to overcome 

the administrative challenges of 

applying. 

While the predictive assessment 

described in proposed § 30.91(c) would 

reduce administrative burden for both 

borrowers and the Department and 

could be implemented quickly because 

it would rely on data the Department 

already has, it would not be able to 

capture all borrowers who are 

experiencing hardship that satisfies the 

proposed standard for waiver. One 

reason is that the Department currently 

does not have data on several of the 

factors described in proposed § 30.91(b), 

such as information on debts not owed 

to the Department or a borrower’s 

expenses for caretaking, housing, and 

other factors, which could be 

burdensome for some borrowers. 

Therefore, the Department would also 

need the discretionary option of 

receiving additional information from 

borrowers through an application 

process so that the Department could 

conduct a holistic assessment of the 

borrower’s circumstances to determine 

whether the borrower meets the 

applicable standard for hardship under 

proposed § 30.91(d). As described in the 

preamble, under this process, the 

Department would determine whether: 

(i) the borrower is highly likely to be in 

default or experience similarly severe 

and persistent negative circumstances, 

and (ii) other options for payment relief 

would not sufficiently address the 

borrower’s persistent hardship. The 

Department could also make this 

determination based on information 

already in the Department’s possession, 

or a combination of information already 

in the Department’s possession or 

received through an application. This 

application-based pathway would be 

important to give borrowers the 

opportunity to provide additional 

information and data that might not be 

captured in existing data systems to 

which the Department has access, or to 

describe any additional relevant 

circumstances. 


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84Barrow, Lisa and Ofer Malamud. ‘‘Is College a 

Worthwhile Investment?’’ Annual Review of 

Economics 7 no. 1 (2015): 519–555. Card, David. 

‘‘The Causal Effect of Education on Earnings.’’ 

Handbook of Labor Economics 3 (1999): 1801–1863. 

85Oreopoulos, Philip and Kjell G. Salvanes. 

‘‘Priceless: The Nonpecuniary Benefits of 

Schooling.’’ Journal of Economic Perspectives 25 

no. 1 (2011):159–184. 

86Moretti, Enrico. ‘‘Estimating the social return to 

higher education: evidence from longitudinal and 

repeated cross-sectional data.’’ Journal of 

econometrics 121, no. 1–2 (2004): 175–212. 87Currie, Janet, and Enrico Moretti. ‘‘Mother’s 

education and the intergenerational transmission of 

human capital: Evidence from college openings.’’ 

The Quarterly journal of economics 118, no. 4 

(2003): 1495–1532; Lochner, Lance, 

‘‘Nonproduction Benefits of Education: Crime, 

Health, and Good Citizenship,’’ in E. Hanushek, S. 

Machin, and L. Woessmann (eds.), Handbook of the 

Economics of Education, Vol. 4, Ch. 2, Amsterdam: 

Elsevier Science (2011); Ma, Jennifer, and Matea 

Pender. Education Pays 2023: The Benefits of 

Higher Education for Individuals and Society. 

Washington, DC: College Board. Milligan, Kevin, 

Enrico Moretti, and Philip Oreopoulos. ‘‘Does 

education improve citizenship? Evidence from the 

United States and the United Kingdom.’’ Journal of 

public Economics 88, no. 9–10 (2004): 1667–1695.; 

Lochner, Lance, and Enrico Moretti. ‘‘The effect of 

education on crime: Evidence from prison inmates, 

arrests, and self-reports.’’ American economic 

review 94, no. 1 (2004): 155–189. 

Overall, the relief contemplated in 

these proposed regulations would 

provide important support in situations 

where a borrower’s investment in 

postsecondary education fails to yield 

the potential benefits from completing 

such an education. Generally, 

postsecondary education provides 

significant individual and societal 

benefits. Earning a postsecondary 

credential typically provides 

individuals with a range of personal 

benefits in the labor market, including 

higher income and lower 

unemployment risk.84 In addition to 

individual benefits related to earnings 

and employment, additional education 

can provide a host of individual 

benefits, including greater access to 

health insurance, increased job 

satisfaction, and overall happiness.85

Increasing levels of postsecondary 

attainment also have spillover benefits 

for communities and society, including 

benefits to those who never attended or 

completed postsecondary education. For 

example, researchers have documented 

that wages of non-college graduates rise 

when the supply of college graduates 

increases.86 Increases in education are 

also linked to higher civic participation, 

reduced crime, and improved health of 

future generations.87

For some borrowers, financing an 

education does not lead to individual 

net benefits. Loans taken out for 

postsecondary education commonly 

take a decade or more to repay, and 

borrowers may never reach sustained 

periods of income security necessary to 

afford and manage their loans. This 

could be because they never complete 

their program and therefore never 

receive a meaningful earnings return, or 

they may lose the income security 

attendant to an education when they 

face unexpected and significant life 

events outside their control, such as the 

need to care for sick dependents, 

expensive medical problems, or the 

onset of disabilities that limit work 

opportunities. 

These proposed regulations would 

establish a framework for the Secretary 

to exercise the discretionary waiver 

authority in a consistent and transparent 

manner. This framework would fill 

existing gaps in relief that are otherwise 

available from the Department to assist 

borrowers with managing repayment of 

their loans. The Department’s existing 

avenues for payment relief, for example, 

may be insufficient to assist older 

borrowers with high student loan debt 

burdens at increased risk of default and 

resulting financial insecurity, or those 

with significant obligations expenses for 

child or dependent care. Therefore, 

these proposed regulations would 

specify the Secretary’s authority to grant 

relief where the Secretary determines 

the borrower’s hardship impairs the 

borrower’s ability to fully repay loans or 

makes collecting the loans unjustifiably 

costly. 

Summary of Proposed Key Provisions 

Table 2.1 below summarizes the 

proposed provisions in the NPRM. 

TABLE 2.1—SUMMARY OF PROPOSED PROVISIONS

Provision Regulatory 

section Description of proposed provision 

Standard for waiver due to likely impairment of borrower ability to fully repay 

or undue costs of collection.

§ 30.91(a) Provides that the Secretary may waive up to the outstanding balance of a Federal 

student loan held by the Department if the Secretary determines that the borrower has experienced or is experiencing hardship related to such a loan such 

that the hardship is likely to impair the borrower’s ability to fully repay the Federal 

government or the costs of enforcing the full amount of the debt are not justified 

by the expected benefits of continued collection of the entire debt. 

Factors that substantiate hardship ........... § 30.91(b) Provides a non-exclusive list of factors the Secretary could consider in determining 

whether a borrower meets the standard for waiver based on hardship. 

Immediate relief for borrowers likely to 

default.

§ 30.91(c) Provides that the Secretary may consider the borrower’s factors indicating hardship 

described in proposed § 30.91(b) to exercise discretion to waive all or some of 

outstanding loans held by borrowers who the Secretary determines have experienced or are experiencing hardship such that their loans are at least 80 percent 

likely to be in default in the two years after the publication of the proposed regulations. 

Process for additional relief ...................... § 30.91(d) Provides that the Secretary may rely on data obtained from an application or by 

any other means, or potentially a combination or both, to provide relief for borrowers who are highly likely to be in default or to experience similarly severe and 

persistent negative circumstances, and other payment relief options do not sufficiently address the borrower’s persistent hardship. 

3. Discussion of Costs, Benefits and 

Transfers 

Overall, waivers that the Secretary 

grants under the proposed regulations 

would result in costs in the form of 

transfers from the Federal Government 

to student loan borrowers. The size of 

these transfers would vary based upon 

the number of borrowers who the 

Secretary determines are at least 80 

percent likely to be in default and, 

therefore, eligible for waiver under 

proposed § 30.91(c). It would also 

depend on the number of borrowers 

who are approved for waivers under 

proposed § 30.91(d). The Department 

believes that these transfers would 


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88Akana, T., & Ritter, D. (2022). Expectations of 

Student Loan Repayment, Forbearance, and 

Cancellation: Insights from Recent Survey Data. 

Federal Reserve Bank of Philadelphia. 

89Cohn, Jason. ‘‘Student Loan Default Patterns: 

What Different Paths through Default Can Tell Us 

about Equitably Supporting Borrowers.’’ (November 

2022). Urban Institute. See also LaVoice, J., & 

Vamossy, D. F. (2024). Racial disparities in debt 

collection. Journal of Banking & Finance, 164, 

107208. 

90The Department provides this information for 

showing proposed § 30.91(c)’s likely effects rather 

than an underlying reason for proposing such a 

waiver. 

provide significant benefits to borrowers 

in the form of waiving their obligation 

to repay some or all of their Federal 

student loan debt. The Department 

would also see benefits from waivers 

granted on loans that are unlikely to be 

repaid in a reasonable period, which 

would prevent or reduce costly 

collection efforts. 

The transfers to borrowers in the form 

of waivers could result in costs to the 

Federal Government and in turn 

taxpayers, to the extent that borrowers 

receiving waivers might otherwise have 

repaid the loan in part or whole, or the 

financial costs of collecting the loan 

might have proved less than the benefits 

of collection. The proposed rules would 

also result in administrative expenses 

for the Department to implement these 

provisions. When considering all these 

factors, the Department believes that the 

benefits from these proposed regulations 

would outweigh the costs. 

What follows is a description of the 

data used to create estimates in this RIA, 

followed by a discussion of the costs, 

benefits, and transfers for each of the 

distinct regulatory provisions. 

Data Used in This RIA 

This section describes the data used 

in the RIA. To generate information 

about the expected number of borrowers 

who would be eligible to receive relief 

under these proposed regulations, the 

Department relied upon non-public 

records contained in the administrative 

data the Department uses to administer 

the title IV, HEA programs. 

The primary data used in the RIA to 

estimate the number of borrowers who 

could potentially qualify for a waiver 

under proposed § 30.91(c) is a 5 percent 

random sample of the Federal 

Department-held student loan portfolio 

with at least one open title IV, HEA 

student loan as of April 30, 2024. We 

are using a random sample including 

over 2 million borrowers, but we 

present all estimates in the analyses 

below in terms of the full Departmentheld student loan portfolio. The data we 

use for modeling in the RIA are stored 

in the National Student Loan Data 

System (NSLDS), maintained by the 

Department’s Office of Federal Student 

Aid. The Department determined that a 

sample of this size was appropriate to 

provide reasonable estimates of the 

impact of the proposed regulation. A 

sample of this size is similar to what the 

Department uses in other modeling, 

such as for the annual President’s 

budget and for the net budget impact 

modeling in this RIA. 

Analysis of Costs, Benefits, and 

Transfers for Each Proposed Regulatory 

Section 

The sections that follow contain a 

discussion of the costs, benefits, and 

transfers for the different proposed 

regulatory provisions if the Secretary 

chooses to grant waivers under such 

provisions. We separately discuss the 

relief potentially provided under 

proposed § 30.91(c)’s pathway for 

‘‘immediate relief’’ and proposed 

§ 30.91(d)’s pathway for ‘‘additional 

relief’’ based on an application or 

information already in the Secretary’s 

possession, or both, because those 

provisions would represent different 

pathways for the Secretary to exercise 

discretion to grant a waiver for a 

borrower. Implementation of each of 

these provisions would include 

administrative costs for the Department. 

Because these administrative costs 

generally would represent baseline 

implementation expenses, we provide a 

separate discussion of administrative 

costs at the end of this part of the RIA. 

We do not include a discussion of 

proposed § 30.91(a) or (b), which would 

establish the standard for hardship and 

the indicators to be considered in 

determining if a borrower is facing 

hardship, because these provisions do 

not describe discretionary pathways for 

relief that may result in costs, benefits, 

and transfers. 

§ 30.91(c) Immediate Relief for 

Borrowers Likely To Be in Default 

Should the Secretary choose to grant 

waivers under proposed § 30.91(c), the 

proposed regulations would result in 

costs in the form of transfers from the 

Department to borrowers through 

waiver of outstanding debt to the 

Department. Waiving these amounts 

would eliminate future payments by 

these borrowers to the Department, 

which is a cost to the Federal 

Government and, by extension, to 

taxpayers. The extent of transfers and 

their associated cost would vary 

depending on the eligible borrower’s 

amount of outstanding debt, loan 

type(s), age of the loan, likelihood of 

repayment, and other factors. The 

proposed regulations would also result 

in administrative expenses for the 

Department to implement these 

provisions. When considering all these 

factors, the Department believes that the 

benefits from these proposed regulations 

would outweigh the costs. 

Borrowers who are in default are 

likely to have repeated instances of 

default or be in default for a protracted 

time. Department data show that almost 

all of those who were likely to be in 

default in the next two years had 

struggles with loan repayment in the 

past, as evidenced by instances of 

current or prior default, or of payment 

delinquency. Acknowledging past 

hardship recognizes that previous 

periods of hardship may have current 

and future consequences for a borrower. 

For example, a borrower who struggled 

to repay their loans may have seen their 

balance increase in size such that full 

repayment of that greater amount is no 

longer feasible. The likelihood of prior 

or persistent repayment struggles 

observed in Department data is similar 

to that found in other data. A Federal 

Reserve Bank of Philadelphia survey of 

borrowers demonstrated that most of the 

individuals who anticipated difficulties 

making loan payments after the 

payment pause ended also reported 

making no or partial payments prior to 

the pandemic forbearance.88 These data 

also suggest that there is greater 

prevalence of longer-term or repeated 

defaults among communities with 

greater shares of Black and Hispanic 

residents, and that student loan default 

commonly co-occurs with delinquency 

and collections on other types of debt, 

such as medical debts and utilities.89

These distributional effects reflect 

underlying differences in income, 

completion status, and other factors that 

correlate with student loan struggles.90

In addition, many of the borrowers 

who might receive a waiver under 

proposed § 30.91(c) have been in 

repayment for an extended time. For 

instance, based on analysis of 

Department data, in 2022, more than 1 

million borrowers held loans that had 

been in default for at least 20 years. 

These borrowers could have been 

subject to negative credit reporting, 

wage garnishment, tax refund offset, and 

even litigation. If these loans are still 

outstanding after all this time, 

notwithstanding the availability of those 

powerful collection tools, the odds that 

they would be fully repaid in a 

reasonable period are unlikely. 

Older loans are also likely to be held 

by older borrowers. Analysis of 

Department data indicates that almost a 


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91U.S. Department of Education. Negotiated 

Rulemaking for Higher Education 2023–2024 

Materials for Student Loan Debt Relief Session 2 

(November 6–7, 2023): Data on Older Borrowers 

and Parents. https://www2.ed.gov/policy/highered/ 

reg/hearulemaking/2023/data-on-older-borrowersand-parents-session-2.pdf. 

92See, for example, The Economics of 

Administration Action on Student Debt, available at 

https://www.whitehouse.gov/cea/written-materials/ 

2024/04/08/the-economics-of-administrationaction-on-student-debt/. 

Di Maggio, M., Kalda, A., & Yao, V. (2019). 

Second chance: Life without student debt (No. 

w25810). National Bureau of Economic Research. 

quarter of borrowers who would receive 

a waiver are over 55 years old. The older 

the borrower, the greater the likelihood 

that they will stop working prior to 

successful repayment. Forty-one percent 

of non-Parent PLUS borrowers 62 years 

of age and older with an open loan have 

held their student loans for more than 

20 years, and 30 percent of borrowers 62 

years of age and older with an open loan 

have held their student loans for more 

than 25 years.91 Waiving such loans 

would not create significant costs for the 

Government in the form of transfers 

because the Department is unlikely to 

receive significant additional payments 

from a retired borrower. 

About two-thirds of borrowers who 

may receive a waiver received a Pell 

Grant in our data, but this number is 

likely an underestimate because Pell 

Grant status is unavailable for most 

borrowers who entered repayment on 

their last loan before 1999. 

Borrowers would receive significant 

benefits from no longer having to repay 

loans, and the Federal Government 

would also see benefits from conserved 

administrative costs through 

discontinued servicing or collecting on 

loans that the Department does not 

expect to be repaid in full. 

As noted above, these transfers would 

create some costs for the Federal 

government and, by extension, 

taxpayers. However, as discussed above, 

these waivers would generally affect 

loans with lower expected repayment 

rates (therefore have a low likelihood of 

generating funds for the Federal 

government), and any limited lost 

revenue from waiving some of the 

Department’s worst-performing loans 

would likely be outweighed by 

significant individual and social 

economic benefits to the borrower. 

Specifically, the waivers proposed here 

would provide borrowers facing 

hardship with a greater ability to avoid 

financial distress, and potentially lower 

delinquency rates on other types of 

debt, promote consumption (which can 

benefit the economic wellbeing of their 

communities), improve access to credit, 

and may reduce reliance on other forms 

of the Federal safety net.92

To estimate the number of borrowers 

we would expect to be eligible for relief 

under proposed § 30.91(c), we followed 

the process described for implementing 

proposed § 30.91(c) above, where we 

used predictors that correspond to the 

17 factors described in proposed 

§ 30.91(b) to predict whether borrowers 

were at least 80 percent likely to be in 

default on a student loan in any quarter 

for the subsequent two years after the 

NPRM’s publication. For the purposes 

of the NPRM, we used a 5 percent 

sample of Department-held loans as of 

April 2024. 

Should the Secretary choose to 

exercise authority under these 

regulations, we estimate that 

approximately 6.0 million borrowers 

would be eligible to receive relief under 

proposed § 30.91(c). This estimate is 

based on output of the proposed model 

developed to estimate the likelihood 

that a borrower would have been in 

default within two years. 

The estimate of borrowers who may 

receive waivers under this provision 

uses data as of April 30, 2024, and 

calculates the two-year measurement 

window as of April 30, 2024. The 

Department chose April 30, 2024, 

because it was the most recent 

comprehensive dataset available to the 

Department at the time that the 

Department was developing the 

proposed model for this NPRM. The 

borrower portfolio may change between 

April 2024 and the publication of the 

NPRM, both in terms of its composition 

(i.e., which borrowers are in the 

portfolio) and in the borrowers’ 

circumstances (e.g., the loans held by 

borrowers and outstanding debt amount 

may change between April 30, 2024 and 

the publication of the NPRM). It is not 

clear what the substantive effects of 

such changes would be, as they could 

drive the model’s outcomes in different 

directions. Estimates presented in the 

NPRM also do not include potential 

overlap with relief that would be 

provided by any proposed rules that are 

not yet final as of the publication of this 

NPRM, or of waivers through other 

provisions that were not yet 

implemented as of April 30, 2024. 

§ 30.91(d) Process for Additional Relief 

Borrowers would benefit from any 

waivers granted by the Secretary under 

proposed § 30.91(d)’s pathway for 

additional relief based upon a holistic 

assessment of information already in the 

Secretary’s possession or submitted by 

the borrower through an application 

process, or both in conjunction, to 

determine whether: (i) the borrower is 

highly likely to be in default or to 

experience similarly severe and 

persistent negative circumstances, and 

(ii) other payment relief options would 

not sufficiently address the borrower’s 

persistent hardship. As further 

described in this NPRM’s preamble, 

such waivers would address challenges 

that these borrowers face while trying to 

repay their loans. While this approach 

would provide overall financial 

benefits, the specific benefits for 

borrowers who receive a waiver would 

vary depending on the nature of their 

qualifying hardship. Waivers granted 

under proposed § 30.91(d) would also 

create administrative costs for the 

Department to implement, which are 

discussed at the end of this subsection 

of the RIA. 

Consider several examples of 

borrowers who may receive waivers 

based on a holistic assessment of the 

factors in proposed § 30.91(b). For 

example, a borrower whose qualifying 

hardship is a result of advanced age, 

having an old loan, and no longer 

working would benefit from no longer 

having to manage a loan payment in 

their final years of life. If they were in 

default, they could also potentially see 

an increase in the total amount of Social 

Security benefits they could retain since 

they would not be at risk of having 

amounts offset. By comparison, a 

borrower who is facing hardship due to 

having extensive expenses caring for an 

elderly relative could also accrue 

benefits, but in a different form, such as 

being able to better afford necessary care 

for that individual, including 

potentially paying for better services for 

that relative. Since the precise facts that 

support waiver under proposed 

§ 30.91(d) would vary across individual 

borrowers’ circumstances based on a 

holistic assessment of their factors in 

proposed § 30.91(b), the specific 

benefits of waiver would vary. But in 

general, to the extent that the hardship 

results in the borrower being 

overburdened by necessary expenses, 

the waiver would help a borrower better 

afford those expenses while maintaining 

basic financial security and also greatly 

reduce or eliminate their risk of 

experiencing the substantial harms of 

default, or other similarly severe 

negative and persistent circumstances. 

Waivers granted under proposed 

§ 30.91(d) would create costs to the 

government in the form of transfers to 

student loan borrowers. These costs 

would also accrue to taxpayers. 

However, we believe the benefits would 

exceed these costs. As discussed, the 

Secretary may provide a waiver under 


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93Other estimates suggest a rate of 10 to 15 

percent over three years, and that rates can vary by 

education level, age, and other characteristics. See, 

for a review, Cellini, S.R., McKernan, S.M., & 

Ratcliffe, C. (2008). The dynamics of poverty in the 

United States: A review of data, methods, and 

findings. Journal of Policy Analysis and 

Management: The Journal of the Association for 

Public Policy Analysis and Management, 27(3), 

577–605, as well as evidence from Sandoval, D.A., 

Rank, M.R., & Hirschl, T.A. (2009). The increasing 

risk of poverty across the American life course. 

Demography, 46, 717–737. and from Hoynes, H.W., 

Page, M.E., & Stevens, A.H. (2006). Poverty in 

America: Trends and Explanations. The Journal of 

Economic Perspectives, 20(1), 47–68. http://

www.jstor.org/stable/30033633. 

94https://blog.ed.gov/2024/04/an-update-on-thefirst-months-of-the-return-to-repayment/. This does 

not include borrowers in default. This figure is 

likely to be a high-water mark, given the challenges 

and policy context of returning to repayment after 

the pandemic, and would be expected to decline in 

the future. 

95For the analyses of SHED data, we stacked five 

years of SHED surveys (2018 to 2022) and used 

survey weights. We include data only for those who 

report student debt but are not currently enrolled 

in school. The SHED data likely undercounts 

borrowers who only hold Parent PLUS loans, and 

the survey does not distinguish between Federal 

student loans specifically and other types of student 

loans. 

96 In the SHED survey, roughly 18 percent of 

those with education debt indicated being behind 

on payments. Among all borrowers who are behind 

on student payments, about 25 percent of borrowers 

report being unemployed or underemployed due to 

a health or medical limitation or a disability, and 

13 percent of borrowers live with parents or adult 

children to provide help with child or medical care. 

These forms of hardship are indicative of the types 

of circumstances that may make borrowers eligible 

to apply for a waiver under § 30.91(d). 

proposed § 30.91(d) only after 

determining: (i) the borrower has 

experienced, or is experiencing, 

hardship such that the borrower is 

highly likely to be in default or to 

experience similarly severe and 

persistent negative circumstances, and 

(ii) other payment relief options do not 

sufficiently address the borrower’s 

persistent hardship. Therefore, 

borrowers who may receive waivers are 

those with lower-than-expected 

repayments who are highly likely to 

struggle with repaying their loans. By 

contrast, as described above, the 

benefits to borrowers could be 

significant. And such waivers could 

provide benefits to the government as 

well. The Department would no longer 

pay to collect on or service loans that 

are highly unlikely to be repaid. And to 

the extent borrowers are facing hardship 

while receiving other Federal benefits, 

such as Social Security, no longer 

having those amounts at risk of being 

offset would allow broader Federal 

benefits to better achieve their intended 

purposes, such as keeping senior 

citizens out of poverty. 

Estimating the number of borrowers 

who could, at the Secretary’s discretion, 

be approved for relief under proposed 

§ 30.91(d) depends on assumptions 

about: (1) the number of borrowers who 

have characteristics that are likely to 

make them eligible for relief based on 

the Department’s holistic assessment of 

their circumstances, and (2) the share of 

borrowers who are potentially eligible 

who would actually apply. At the end 

of this section, to inform the estimates 

of administrative costs, we discuss 

further assumptions about the number 

of borrowers who would apply, but who 

we would expect would not be 

approved for discretionary relief. In the 

sections below, we describe the 

information the Department considered 

to reach estimates used in this NPRM. 

Recognizing data limitations and that 

there are no perfect historical analogs 

that could inform estimates with perfect 

precision, we included a directed 

question that solicits feedback and input 

from the public about other data or 

information that could be used to 

improve and refine estimates. 

First, we consulted available 

Department data on borrowers and 

national survey data related to student 

debt holders to inform the number of 

borrowers who have characteristics that 

are likely to make them eligible for relief 

based on the Department’s holistic 

assessment of their circumstances. 

These borrowers would need to have 

indicators that show they are highly 

likely to be in default or experience 

similarly severe negative and persistent 

circumstances, that would not be 

sufficiently addressed by other options 

for payment relief. In addition, the 

Department anticipates that proposed 

§ 30.91(c) would, at the Secretary’s 

discretion, be implemented first and 

that such relief would likely be 

sufficient to address the hardship of a 

borrower who receives such relief. 

Therefore, because we do not want to 

double count borrowers, the estimate for 

proposed § 30.91(d) discussed below 

does not include borrowers who would 

be expected to receive full relief under 

proposed § 30.91(c). 

As a starting point the Department 

consulted economic studies of 

individuals experiencing poverty. We 

believe estimates of persistent poverty 

provide an important perspective on 

borrowers who may have enduring 

negative economic conditions, even if it 

is not the perfect comparison. Poverty 

by itself may not lead to relief under 

proposed § 30.91(d), but people in 

poverty often face challenges such as 

not being able to afford necessary 

expenses. In addition, other available 

payment relief options might address 

episodic spells of poverty. As described 

earlier, the Department expects that a 

borrower would need to have indicators 

showing a high likelihood of persistent 

hardship rather than a short-term 

hardship to receive relief under this 

provision. On the other hand, it is also 

possible that borrowers could be facing 

persistent hardship and receive relief, 

even if they are not considered in 

poverty. Even acknowledging these 

limitations, we believe estimates of 

persistent poverty are a reasonable 

consideration for estimates under 

proposed § 30.91(d). 

Studies suggest that a meaningful, but 

small, share of the population 

experience persistent poverty, defined 

in many studies as having an income 

below the Federal Poverty Level. For 

example, longitudinal studies of 

families experiencing poverty, using the 

Panel Study of Income Dynamics 

suggest that between about 3 to 5 

percent of adults are exposed to 

instances of poverty that last five years 

or more across their adult lifetimes.93

Therefore, if we applied the persistent 

poverty rate of 3 percent to 5 percent to 

the number of ED-managed borrowers in 

the current portfolio, we might expect 

somewhere between 1 and 2 million 

borrowers in the current portfolio to 

experience persistent economic 

hardship at some point in their 

adulthood that would meet the 

eligibility requirements under 

§ 30.91(d). 

This range of 1 to 2 million borrowers 

from the current portfolio is 

corroborated through other data sources. 

In Department data, as of December 

2023, there were about 9 million 

borrowers who were recorded as past 

due in their payments.94 Solely being 

behind on student loan payments would 

not lead to eligibility for a waiver under 

§ 30.91(d). Therefore, the Department 

also reviewed information that was 

reported in the Federal Reserve Board’s 

Survey of Household Economics and 

Decisionmaking (SHED).95 The SHED 

provides information about borrowers 

and their personal finances, and 

indicates whether borrowers who were 

behind on student loan payments also 

reported some other condition that 

could indicate hardship, such as being 

unemployed or underemployed due to a 

health or medical limitation or a 

disability or living with parents or adult 

children to provide help with child or 

medical care.96 Those data indicate that 

about 13 to 25 percent of borrowers who 

are behind on student loan payments 

also reported one of these other 

indicators. Applying those percentages 

to the current portfolio of borrowers 

implies that between 1 to 2 million 

borrowers may be experiencing some 


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97See, e.g., U.S. Government Accountability 

Office. College Closures: Many Impacted Borrowers 

Struggled Despite Being Financially Eligible for 

Loan Discharges. (September 2021). Accessed at 

https://www.gao.gov/products/gao-21-105373. See 

the review in Ko & Moffit (2022). Take-up of Social 

Benefits. NBER Working Paper 30148. Also see 

various articles in ‘‘Administrative Burdens and 

Inequality in Policy Implementation’’ Part I and 

Part II in RSF: The Russell Sage Foundation Journal 

of the Social Sciences, volume 9, issues 4 and 5, 

2023 and Currie, Janet (2006). The Take-up of 

Social Benefits. In Public Policy and the Income 

Distribution. Russell Sage Foundation. Herd & 

Moynihan (2018). Administrative Burdens. 

98 Kuka and Stuart (2022). Racial Inequality in 

Unemployment Insurance Receipt and Take Up. 

NBER Working Paper 29595. 

99For example, see https://

budgetmodel.wharton.upenn.edu/issues/2023/7/17/ 

income-driven-repayment-modeling-take-up-rates. 

100Rates can vary by education level, age, and 

other characteristics. See, for a review, Cellini, S.R., 

McKernan, S.M., & Ratcliffe, C. (2008). The 

dynamics of poverty in the United States: A review 

of data, methods, and findings. Journal of Policy 

Analysis and Management: The Journal of the 

Association for Public Policy Analysis and 

Management, 27(3), 577–605, as well as evidence 

from Sandoval, D.A., Rank, M.R., & Hirschl, T.A. 

(2009). The increasing risk of poverty across the 

Continued 

substantial economic hardship and 

report being behind on payments. We 

would expect that borrowers reporting a 

greater number of economic challenges 

in survey data might be more indicative 

of the type of hardship that would 

qualify for a waiver under § 30.91(d). In 

the SHED data, about 40 percent of the 

student loan borrowers who are behind 

on payments experience both conditions 

described above, which would imply an 

estimate of the number of borrowers in 

the current portfolio in the range of 0.4 

to 0.8 million borrowers. These ranges 

are based on a single point in time. 

Under § 30.91(d), borrowers would need 

to face hardship consistently in order 

qualify for a waiver, so estimates based 

on an isolated observation likely 

overestimates the number of borrowers 

who are facing persistent challenges on 

these factors. On the other hand, a point 

in time observation would not count 

borrowers who may experience 

struggles in the future, even if not 

showing such markers at the time of the 

survey. 

For our base assumptions, we take the 

high end of the range suggested by 

available evidence and assume that 

about 2 million borrowers from the 

current portfolio would potentially have 

characteristics that might make them 

highly likely to be in default or 

experience similarly severe negative and 

persistent circumstances at some point 

in their remaining repayment. As we 

discuss later, other payment relief 

options might sufficiently address the 

hardship for some of these borrowers, 

not all borrowers who might be eligible 

will apply for relief, and most borrowers 

will not have sufficient data already in 

the Department’s possession that would 

be necessary for any non-applicationbased relief. 

We assume a take up rate of 75 

percent among the 2 million borrowers 

from the current portfolio that we 

estimate would be potentially eligible 

for relief. This take up rate is blended 

across borrowers who might meet the 

standard for relief under proposed 

§ 30.91(d), described above, based on 

the Department conducting holistic 

assessments that may either rely on data 

already in the Secretary’s possession, 

data submitted by the borrower through 

an application, or a combination of 

both. This borrower estimate assumes 

that, as noted above, the Department 

would need to expand or refine data 

elements in the future to provide relief 

to borrowers under proposed § 30.91(d) 

without an application because, at the 

time of preparing this NPRM, the 

Department does not have sufficient 

data available to determine whether a 

borrower meets the eligibility standard. 

Borrowers for whom the Department 

possesses sufficient information to 

conduct the holistic review without data 

acquired from an application would not 

need to apply (implying a take up rate 

of 100 percent), but the Department 

anticipates that the number of such 

borrowers based on future data matches 

or data collections would be small. 

Ample evidence suggests that borrowers 

do not always apply for benefits for 

which they are eligible for many 

reasons, including because of the 

burden associated with application and 

lack of knowledge about the benefits. 

Evidence from other settings—none 

being perfect analogies—including from 

SNAP, the Earned Income Tax Credit 

(EITC), and Unemployment Insurance, 

suggest a range of take-up rates that 

differ across benefit amounts, salience, 

and eligible populations.97 Many of the 

programs with high take-up rates, such 

as SNAP and EITC, which have take-up 

rates at or above 80 percent, are well 

known and have been around for a long 

time, and some programs have 

infrastructures that help beneficiaries 

apply. Other researchers have reported 

take up of Unemployment Insurance of 

42 percent to 55 percent.98 There are 

reasons to believe that the take-up rate 

for forgiveness proposed under 

§ 30.91(d) could be lower than those for 

SNAP or EITC, since this would be a 

new program, benefits would be 

uncertain, and many borrowers do not 

engage with student loan programs that 

can be beneficial to them. In sensitivity 

analyses below, we assume a lower takeup rate. 

We also assume that about one-third 

of these remaining borrowers would 

benefit from other payment relief 

options that could sufficiently address 

their hardship. Some estimates suggest 

that payment relief options available 

from the Department can benefit large 

swaths of borrowers; 99 however, not all 

borrowers who benefit from existing 

payment relief options will have their 

hardship sufficiently addressed. 

This leads to an estimate of 1 million 

borrowers, or about 2.5 percent of the 

current portfolio, who we expect could, 

at the Secretary’s discretion, be 

approved for relief under proposed 

§ 30.91(d) in the period after this 

regulation is implemented and 

throughout the remainder of the 

borrowers’ repayment periods. We also 

estimate that an additional 1 million 

borrowers who could, at the Secretary’s 

discretion, be approved among the next 

10 cohorts of borrowers. To arrive at 

estimates of borrowers who would be 

affected in the next ten future cohorts, 

we assume that 5 percent of each cohort 

could, at the Secretary’s discretion, be 

approved for a waiver under proposed 

§ 30.91(d) at some point in their 

repayment. This is double the share of 

borrowers estimated in the current 

portfolio because borrowers in the 

current portfolio would receive waivers 

on a one-time basis under proposed 

§ 30.91(c), whereas borrowers in future 

cohorts would not. Using an assumption 

of roughly 2 million new borrowers 

each year for the next ten years, this 

leads to an estimate of roughly 100,000 

borrowers per cohort, and 1 million 

borrowers over these cohorts. 

In addition to our primary estimate, 

we include low and high estimates to 

bound the range of reasonable possible 

waivers under proposed § 30.91(d). Our 

low estimate assumes that the take-up of 

application-based relief is 50 percent 

(instead of 75 percent), but still assumes 

that one-third of eligible borrowers 

benefit from other payment relief 

options. This results in a total of 1.33 

million borrowers who could, at the 

Secretary’s discretion, be approved for 

relief, 0.67 million among the current 

portfolio, and 0.67 million from future 

borrower cohorts. In our high estimate, 

we assume a larger share of borrowers 

would qualify for relief. Specifically, we 

assume that 10 percent of borrowers in 

the current portfolio could be approved 

for a waiver under proposed § 30.91(d). 

This larger share aligns with estimates 

from research suggesting that 10 percent 

of adults experience spells of poverty 

that last at least three years, whereas the 

5 percent in our base estimate was based 

on five-year spells.100 Similar to our 


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American life course. Demography, 46, 717–737. 

and from Hoynes, H.W., Page, M.E., & Stevens, A.H. 

(2006). Poverty in America: Trends and 

Explanations. The Journal of Economic 

Perspectives, 20(1), 47–68. http://www.jstor.org/ 

stable/30033633. 

base case, we assume a take-up rate of 

75 percent and that 1⁄3 of borrowers get 

relief through another option. In this 

high scenario, we estimate that 2 

million borrowers in the current 

portfolio, and 2 million borrowers in 

future cohorts would qualify. We note 

that overall estimates could be reduced 

once they account for other, anticipated 

regulatory actions that provide relief to 

borrowers with education debt. 

We also consider the possibility that 

the Department could potentially use 

data aligned with the factors listed in 

§ 30.91(b) that was not obtained through 

an application (e.g. from additional or 

refined data to which the Department 

has access in the future). In such 

potential cases, a borrower could 

receive a waiver if the Department’s 

holistic review of the borrower’s data 

satisfied the same stringent standard 

that the Department would apply for 

application-based relief under proposed 

§ 30.91(d) (e.g., the borrower must be 

highly likely to be in default or 

experience similarly severe and 

persistent negative circumstances, and 

other payment relief options would not 

sufficiently address the borrower’s 

persistent hardship). Such cases would 

be considered rare since the data that 

the Department may possess would 

have to sufficiently establish eligibility, 

sufficiently show that other options for 

payment relief did not address the 

borrower’s hardship, and sufficiently 

distinguish such borrowers from 

otherwise similar borrowers who would 

not be deemed to qualify for relief. 

We interpret the potential for such 

waivers to occur on the margin of the 

take-up rate that we have built into our 

overall estimates. Changes to the 

assumptions about the total number of 

borrowers who could be approved 

because of the potential for nonapplication waivers would not be due to 

differences in the applicable eligibility 

standard, but rather assumptions about 

the precision with which various data 

sources could identify borrowers who 

were experiencing hardship that could 

qualify under the standard for relief in 

proposed § 30.91(d). Our base case 

assumption includes a 75 percent takeup rate, and we believe this already 

generously incorporates a high implied 

take-up rate for a small share of 

borrowers who might receive waivers 

under proposed § 30.91(d) without an 

application. However, we consider the 

possibility that there could be a higher 

take-up rate, for example, 80 percent. 

We also consider that a greater number 

of borrowers could potentially be 

approved. Assuming that 5 percent 

more borrowers could be approved, and 

a take-up rate of 80 percent, our primary 

estimates of who would receive relief 

under proposed § 30.91(d) would 

increase from 1 million borrowers in the 

current portfolio to about 1.1 million. 

We do not formally run a new budget 

scenario below with these different 

assumptions, as we believe those 

estimates would be below the high 

scenario already discussed above. 

The Department also considered how 

to estimate how many applications it 

would receive, and the rate at which an 

application for waiver would be likely 

to be approved at the Secretary’s 

discretion. As with the discussion 

above, there is no perfect comparison on 

which to rely. However, considering 

that some borrowers who are ineligible 

will apply, and that for other borrowers, 

other options for payment relief would 

sufficiently address the borrower’s 

hardship, we assume that for every 

borrower who is approved at the 

Secretary’s discretion, there would be 

one that is rejected, i.e., we assume an 

approval rate of 50 percent. 

For estimating the potential 

application rates, the Department 

considered situations that might be 

closely analogous to the applicationbased approach contemplated by 

proposed § 30.91(d), whereby the 

Secretary would conduct a holistic 

assessment of the borrower’s factors 

indicating hardship to determine if the 

borrower met the standard for waiver 

described in proposed § 30.91(d). We 

identified few comparative situations. 

Applications similar to the ones for IDR, 

Public Service Loan Forgiveness, or the 

prior pandemic-related student debt 

relief plan under the HEROES Act were 

not closely relevant for this estimation, 

because they generally only involve 

completing straightforward background 

questions and checking certain boxes, 

and there is no meaningful open 

response required from the borrower. By 

contrast, the Department expects that 

the application for relief under 

proposed § 30.91(d) would solicit a 

range of qualitative and quantitative 

information from the borrower to inform 

the Department’s determination of 

whether the borrower satisfies the 

hardship standard. 

We also considered using the rate of 

approvals when borrowers submit 

applications to use a different payment 

amount when seeking to rehabilitate 

their loans, but that information is not 

readily tracked by the Department’s 

contractor. Even if an approval rate were 

available, that form may still not be an 

appropriate comparison, since it only 

affects borrowers in default and those 

borrowers have particular 

characteristics in terms of 

postsecondary completion, type of 

institution, and debt balance that might 

be different than the broader population 

of borrowers. Another approval rate we 

considered was borrower defense to 

repayment. Borrower defense also is not 

a perfect comparison because it tends to 

have disproportionate numbers of 

applications from borrowers who 

attended private for-profit colleges than 

might be expected to occur here, and 

there are significant differences between 

the factors that justify borrower defense 

to repayment and the waivers proposed 

here. 

Unless specified otherwise in the 

above discussion, estimates of 

borrowers who would be eligible for 

relief under proposed § 30.91(d) do not 

account for potential overlap with relief 

that may be provided by any other 

proposed regulations that are not yet 

final as of the publication of the NPRM, 

or of waivers through other provisions 

that were not yet implemented as of 

April 30, 2024. 

We invite feedback from the public 

about how to refine these estimates. 

Administrative Costs 

The proposed regulations could result 

in significant administrative costs for 

the Department. These costs would be 

relatively small for immediate relief 

granted under proposed § 30.91(c). For 

that type of relief, the Department 

would expend one-time resources on 

developing the predictive assessment 

contemplated in proposed § 30.91(c) 

that would predict the likelihood that a 

borrower will be in default within two 

years after the publication of these 

proposed regulations. But the 

Department would not need to expend 

significant further resources to apply the 

predictive assessment to a borrower’s 

information and would not need to 

expend any resources developing an 

application, disseminating the 

application, and reviewing and 

processing the application. 

For relief granted under the 

application-based pathway described in 

proposed § 30.91(d), however, the 

Department would incur significant 

costs to create, disseminate, and process 

applications to complete a holistic 

assessment of the information submitted 

by the borrower related to hardship. The 

Department would need to either 

repurpose or hire additional staff for 

this purpose. This would create 

expenses for systems to accept and track 

the status of applications as well as callVerDate Sep<11>2014 19:42 Oct 30, 2024 Jkt 262001 PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 E:\FR\FM\31OCP3.SGM 31OCP3

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101The Department notes that the baseline also 

includes the existence of the final regulations 

published in July 2023 that made various changes 

to the Department’s pre-existing income contingent 

repayment plan (known as the Revised Pay As You 

Earn, or REPAYE, plan) and to the Department’s 

other income contingent repayment plans. Those 

regulations also changed the name of the REPAYE 

plan to the Saving on a Valuable Education (SAVE) 

plan. See 88 FR 43820. Several states have 

challenged the SAVE regulations as part of ongoing 

litigation. See generally Missouri v. Biden, No. 24– 

2332 (8th Cir.); Alaska v. Department of Education, 

Nos. 24–3089, 24–3094 (10th Cir.). Because the 

SAVE regulations have not been permanently 

enjoined, it is appropriate to include them in the 

baseline. The Department recognizes that if the 

SAVE regulations are permanently enjoined, this 

could increase the estimated costs for these 

regulations because there may be more borrowers 

who are eligible for relief. For example, in the 

absence of provisions under SAVE or other ICR 

plans, the Department expects there would be more 

borrowers eligible for relief under proposed 

§ 30.91(d) since more borrowers would be likely to 

be in default or experience similarly severe negative 

and persistent circumstances, and existing payment 

relief options would not sufficiently address their 

persistent hardship. The Department notes that 

even if the estimated costs increased in such a 

manner, the Department believes the benefits of 

these proposed regulations would still outweigh the 

costs since the proposed regulations would 

authorize providing waivers to borrowers who are 

unlikely to fully repay their loans and, relatedly, 

the waivers would discharge debt that the 

Department is unlikely to fully collect in a 

reasonable period of time. 

102 89 FR 27564 (April 17, 2024). As described 

above, see n.1, supra, a Federal district court has 

issued an injunction focused on these separate 

proposed rules published on April 17, 2024. See 

Missouri v. Biden, No. 24–cv–1316 (E.D. Mo.). As 

of the date of publishing this NPRM, that separate 

litigation focused on the April 2024 NPRM remains 

pending with no final decision on the merits. 

center staffing costs to address inquiries 

related to the application process. The 

degree of these costs would vary based 

upon the number of applications the 

Department has the capacity to process 

in a year. Increasing the Department’s 

capacity to holistically assess 

applications would require hiring more 

staff, either directly or through 

subcontractors. Greater initial costs for 

staff could result in lower long-term 

costs, however, as we anticipate that 

most borrowers who are initially 

interested in the application-based 

process would do so soon after such 

process is available. We anticipate that 

future applications would come from 

newer borrowers or those with a 

significant change in their 

circumstances such that they have now 

decided to seek a hardship waiver. 

The Department has developed 

estimates of the administrative costs for 

the application-based pathway specified 

in proposed § 30.91(d) by considering 

existing analogous administrative 

processes, particularly the costs related 

to reviewing applications for borrower 

defense to repayment. Those processes 

share some similarities, particularly that 

borrowers submit applications that may 

reveal information and evidence that is 

not otherwise available to the 

Department and must be reviewed. 

There are also some key differences. 

First, borrower defense requires 

conducting fact-finding related to an 

institution. That can be a significant 

upfront investment of time, but any 

findings from that work can then be 

applied to multiple applications. 

Second, the review of borrower defense 

applications is generally carried out by 

attorneys. This reflects the legal 

standards used for borrower defense 

approvals, which often include making 

determinations about the nature of 

misrepresentations and meeting certain 

evidentiary bars that are grounded in 

concepts similar to those used by States 

in their unfair and deceptive acts and 

practices (UDAP) laws. 

The proposed application-based 

approach for hardship waivers under 

proposed § 30.91(d) would be different. 

First, we do not anticipate that the factfinding related to institutional conduct 

would apply to the Department’s review 

of applications under proposed 

§ 30.91(d). Second, we do not anticipate 

that the individuals reviewing hardship 

applications would need to be attorneys. 

That means the typical staffing cost 

could be lower than it is for borrower 

defense. 

Based upon these considerations, the 

Department modeled the possible 

administrative costs of the applicationbased pathway described in proposed 

§ 30.91(d) in the following manner. 

First, we assumed that the cost per hour 

to review was $50. This is based on the 

current hourly rate used by 

subcontractors for the Office of Federal 

Student Aid in the Department of 

Education, which is roughly half the 

hourly rate were Department staff hired 

for the same process. We then assumed 

that it would take each reviewer on 

average 30 minutes to review an 

application and render a recommended 

decision to the Secretary. The 30-minute 

estimate is similar to how long 

Department contractors typically take to 

review a form where borrowers submit 

detailed income and expense 

information when seeking to rehabilitate 

a defaulted loan (information collection 

1845–0120). We expect that some 

applications would be faster while 

others that include significant 

additional information might take 

longer. The overall administrative cost 

would then depend on how many 

applications the Department anticipates 

receiving annually as well as how many 

we anticipate being able to review in a 

year. The number would also be higher 

or lower depending on the number of 

applications processed each year, the 

total number of anticipated 

applications, and the average time to 

review the application. If we expect a 

total of 4 million applications, at the 

current hourly rate and expected review 

time, the personnel costs for application 

review is estimated at about $100 

million. We will continue to refine these 

estimates based upon comments 

received from the public. 

In addition to staffing costs, the 

Department also anticipates incurring 

some administrative costs for updating 

and maintaining data systems to process 

the intake of applications from 

borrowers seeking hardship waivers, 

staffing call centers for questions, and 

costs to train system users. We estimate 

this amount to be approximately $9 

million in the first year, and an 

additional $1.7 million each year 

thereafter. 

4. Net Budget Impact 

Table 4.1 provides an estimate of the 

net Federal budget impact of these 

proposed regulations that are 

summarized in Table 2.1 of this RIA. 

This includes both costs of a 

modification to existing loan cohorts 

and costs for loan cohorts from 2025 to 

2034. A cohort reflects all loans 

originated in a given fiscal year. 

Consistent with the requirements of the 

Federal Credit Reform Act of 1990 

(FCRA), budget cost estimates for the 

student loan programs reflect the 

estimated net present value of all future 

non-administrative Federal costs 

associated with a cohort of loans. The 

baseline for estimating the cost of these 

final regulations is the President’s 

Budget for 2025 (PB2025) as modified 

for changes to debt management 

policies. The baseline 101 does not 

include any changes related to the 

student debt relief provisions described 

in the NPRM published April 17, 

2024.102 Should such debt relief 

provisions be finalized as proposed in 

the April NPRM and should the 

Department provide waivers under such 

provisions, the Department expects that 

the estimated costs of these regulations 

would decrease. 


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TABLE 4.1—ESTIMATED NET BUDGET IMPACT OF THE NPRM FOR DIRECT LOANS AND ED-HELD LOANS

[$ in millions] 

Section Description 

Modification 

score 

(1994–2024) 

Outyear 

score 

(2025–2034) 

Total 

(1994–2034) 

§ 30.91(c) .............................. Immediate relief for borrowers likely to be in default ......... 70,200 ........................ 70,200 

§ 30.91(d) .............................. Application-based relief for borrowers experiencing hardship.29,600 12,100 41,700 

It is possible that a borrower who is 

eligible for immediate relief under 

proposed § 30.91(c) may also be 

inclined to apply for relief under 

proposed § 30.91(d). For budgeting 

purposes, however, we assume that all 

relief would be full relief, and that if a 

borrower qualifies for and receives a 

waiver under proposed § 30.91(c) then 

they would not also receive a waiver 

under proposed § 30.91(d). Accordingly, 

the primary budget estimate stacks the 

scores in the order shown on the 

assumption that immediate relief under 

proposed § 30.91(c) would be provided 

to eligible borrowers prior to any 

additional relief under proposed 

§ 30.91(d) to different borrowers. The 

Department believes this stacked 

estimation is appropriate for the 

primary estimates of the proposed 

regulations. 

Methodology for Budget Impact 

The Department estimated the budget 

impact of the proposed provisions in 

this NPRM through changes to the 

Department’s Death, Disability, and 

Bankruptcy (DDB) assumption that 

handles a broad range of loan discharges 

or adjustments, the collections 

assumption to reflect balance changes 

on loans that ever defaulted, and the 

IDR assumption for effects on borrowers 

in those repayment plans. The DDB 

assumption is used in the Student Loan 

Model (SLM) to determine the rate and 

timing of loan discharges due to the 

death, disability, bankruptcy, or other 

discharge of the borrowers (this model 

is not the same as the predictive 

assessment that is described for 

determining whether a borrower may be 

eligible for a waiver under proposed 

§ 30.91(c)). The SLM is designed to 

calculate cash flow estimates for the 

Department’s Federal postsecondary 

student loan programs in compliance 

with the FCRA and all relevant Federal 

guidance. The SLM calculates student 

loan net cost estimates for loan cohorts 

where a cohort consists of the loans 

originated in a given budget (fiscal) 

year. The model operates with input 

data obtained from historical experience 

and other relevant data sources. The 

SLM cash flow components range from 

origination fees through scheduled 

principal and interest payments, 

defaults, collections, recoveries, and 

fees. The cash flow time period begins 

with the fiscal year of first disbursement 

and ends with the fiscal year of the 

events at the end of the life of the loan: 

repayment, discharge, or forgiveness. 

For each loan cohort, the SLM 

contains separate DDB rates by loan 

program, population (Non-Consolidated, 

Consolidated Not From Default, and 

Consolidated From Default), loan type, 

and budget risk group (Two-Year 

Proprietary, Two-Year Public and Notfor-Profit, Four-Year Freshman and 

Sophomore of all institution types, 

Four-Year Junior and Senior of all 

institution types, and Graduate Student 

of all institution types). The DDB rate is 

the sum of several component rates that 

reflect underlying claims data and 

assumptions about the effect of policy 

changes and updated data on future 

claims activity. In general, DDB claims 

are aggregated as the numerator by fiscal 

year of origination and population, 

program, loan type, risk group, and 

years from origination until the DDB 

claims. Zeros are used for any missing 

categories in the numerator. Net loan 

amounts are aggregated as the 

denominator by fiscal year of 

origination and population, program 

loan type, and risk group. The DDB rate 

is simply the ratio of the numerator to 

the denominator. Because the SLM only 

allows for DDB rates to be specified up 

to 30 years from origination, DDB claims 

occurring more than 30 years after 

origination are included in the year 30 

rate. DDB rates for future cohorts are 

forecasted using weighted averages of 

prior year rates and have a number of 

additions and adjustment factors built 

into them to capture policies or 

anticipated discharges that are not 

reflected in the processed discharge data 

yet, including adjustments for 

anticipated increased borrower defense 

and closed school activity. 

For estimates related to waivers 

granted to borrowers enrolled in IDR 

repayment plans, the Department has a 

borrower and loan type level submodel 

that generates representative cashflows 

for use in the SLM. This IDR submodel 

contains information about borrowers’ 

time in repayment, the use of 

deferments and forbearances, estimated 

incomes and filing statuses, and annual 

balances. Therefore, we are able to 

identify or assign the borrowers in the 

IDR submodel who would be eligible for 

one of the waivers in proposed § 30.91 

and incorporate that effect by ending the 

payment cycle for borrowers who would 

be eligible to receive a waiver under 

proposed § 30.91(c) or (d). 

The estimated cost of waivers under 

proposed § 30.91(c) or (d) varies 

depending on whether the borrower is 

in IDR, as well as whether the waiver is 

a full or partial discharge of the loan. 

Partial waiver of balances for borrowers 

already modeled to be on an IDR plan 

could have three different effects 

depending upon whether the borrower 

was expected to get IDR forgiveness 

prior to these waivers, and whether the 

waiver changes that anticipated 

outcome. These potential effects would 

be: 

1. Before and after the waiver is 

applied, borrowers are expected to 

receive some IDR forgiveness at the end 

of their repayment term. For these 

borrowers, the waivers would affect the 

amount ultimately forgiven, but because 

payments are based upon income and 

the amount of time borrowers would be 

expected to repay is unchanged, there 

would be no effect on the amount of 

anticipated future payments. 

2. The borrower was expected to 

receive IDR forgiveness before the 

waiver’s application, but afterward is 

now expected to pay off their balance 

before receiving IDR forgiveness. 

Because these borrowers would now be 

expected to repay in less time, there 

would be some reduction in the amount 

of anticipated future payments. 

3. Before applying the waiver, the 

borrower was expected to retire their 

loan balance prior to receiving IDR 

forgiveness, but as a result of the policy 

would now be expected to retire their 

balance sooner. Because these borrowers 

would now be expected to repay in less 

time, there would be some reduction in 

the amount of anticipated future 

payments. 


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Generally, we project that most partial 

waivers for borrowers modeled to be on 

IDR would end up in the first group. 

Since these borrowers would not see a 

change in the amount they pay before 

receiving forgiveness, we do not assign 

a cost to the waivers for these 

borrowers. Any costs for waivers 

granted to borrowers who are modeled 

to be on IDR come from either full 

waivers or the minority of borrowers in 

the second and third groups, for whom 

the waivers would reduce the number of 

payments needed to fully repay their 

loan. 

For estimates related to the effects of 

the proposed waiver provisions on 

borrowers with loans not in IDR plans, 

the Department’s approach would be to: 

(1) estimate the potential waiver 

amounts borrowers would be eligible for 

and aggregate them by loan cohort, loan 

type, and budget risk group used in the 

SLM; (2) add the waiver amounts for 

non-defaulted, non-IDR borrowers to the 

Department’s baseline DDB assumption 

in FY 2025; and (3) remove the amounts 

associated with the waiver provisions 

from defaulted, non-IDR borrowers from 

the baseline collections assumption. 

The revised IDR, DDB and collections 

groups are run in a SLM scenario for 

each provision to generate the estimates 

in Table 4.1. To produce the potential 

waiver amounts in Step 1 of this 

process, the Department developed a 

loan-level file based on the FY2023 

sample of NSLDS information used for 

preparing budget estimates, with 

balance information supplemented by 

redrawing key loan information as of 

June 13, 2024, to account for the 

discharges and waivers that occurred in 

FY2024 and reduced borrower’s 

balances to zero. Information from this 

file would allow the evaluation of times 

in repayment that would qualify for one 

of the provisions and anticipated future 

balances for use in calculating the 

amount that the Secretary might waive 

for borrowers who have experienced 

changes in balance. 

These estimates are all based on the 

same random sample of borrowers that 

the Department uses for all other budget 

estimation activity related to Federal 

student loans. Currently, the most 

recent sample available is from the end 

of FY2023, which is the best currently 

available data that maintains the 

Department’s consistent scoring 

practices. 

The Department followed two 

different approaches for modeling the 

estimated cost of the provisions in 

proposed § 30.91(c) and (d). For 

proposed § 30.91(c), the Department 

considered the output of the model 

developed to project the likelihood that 

a borrower would be in default within 

two years. We used that model to 

estimate the number of borrowers by 

risk group as well as repayment status 

(e.g., in default or in repayment) and 

estimated the cost of forgiving those 

loans. For the outyear cohorts, we 

randomly assigned borrowers to default 

based on default rates by cohort, risk 

group and loan type assumed in the 

President’s Budget for FY2025 baseline. 

This approach reflects that under 

proposed § 30.91(c), the Secretary may 

identify borrowers eligible for relief 

based on a predictive assessment, 

without requiring any action by those 

borrowers. 

The Department took a different 

approach for proposed § 30.91(d). That 

proposed provision describes an 

application-based pathway for relief 

whereby the Secretary may conduct a 

holistic assessment of the borrower’s 

factors indicating hardship based on 

information obtained through an 

application process in addition to 

potentially supplementing that data 

with information already in the 

Department’s possession. To model this 

approach, the Department generated 

assumptions of the number of borrowers 

who would be eligible for a waiver. Of 

this number of assumed eligible 

applicants, we then calculated the 

distribution of borrowers across risk 

group (e.g., 2-year proprietary, graduate 

borrowers, and 4-year nonprofit or 

public institutions), and by cohort year. 

We describe this process in greater 

detail below. 

First, as described earlier, the 

Department considered multiple 

potentially comparable situations it has 

dealt with in the past to estimate the 

number of applications from borrowers 

seeking proposed waivers related to 

hardship. We examined the volume 

associated with borrowers on IDR plans, 

those who applied for student debt 

relief under the HEROES Act, and those 

who applied for economic deferment or 

hardship from a period prior to the 

payment pause. With no perfect analog 

but based on the best available data, we 

use a base estimate that about 1 million 

borrowers in the current portfolio would 

be approved for relief. The estimate of 

borrowers who would be affected in 

future cohorts over the next ten years is 

1 million. 

To reduce the possibility in the net 

budget impact estimate that borrowers 

who might be otherwise captured under 

proposed § 30.91(c) and could 

potentially be double counted in both 

proposed § 30.91(c) and proposed 

§ 30.91(d), we estimated the cost of the 

waivers proposed in proposed § 30.91(d) 

after accounting for the cost of proposed 

§ 30.91(c) and only allowed borrowers 

to receive a waiver under one of the 

proposed provisions. The Department 

seeks feedback about the assumed 

number of borrowers who would be 

approved for a waiver under proposed 

§ 30.91(d), and we will continue to 

refine this estimate. 

Next, to estimate the distribution of 

approved applicants across risk group 

and cohort year, the Department 

consulted the closest past situations that 

might operate similarly to the proposed 

waivers. This included looking at the 

distribution of borrowers across risk 

group and cohort year who submitted 

applications for relief under the 

HEROES Act Plan that was announced 

in August 2022, borrowers who ever 

defaulted on loans based on Department 

data, and borrowers who had a 

qualifying economic hardship 

forbearance or deferment. While not 

exact corollaries, these data nonetheless 

provide useful information on which 

types of borrowers might choose to 

apply. We believe these are better 

comparisons for thinking about the 

distribution of approved borrowers than 

other types of existing information. For 

instance, we do not think closed school 

loan discharges would be a good 

comparison, because those borrowers 

only come from colleges that closed, 

which would largely exclude public 

institutions. We also chose not to use 

borrowers who documented income and 

expense information when seeking a 

loan rehabilitation, because these 

borrowers are disproportionately likely 

to have not finished their postsecondary 

programs, whereas the hardship 

applications could come from borrowers 

who graduated but who are struggling 

on their loans in ways beyond just being 

in default. 

Specifically, to estimate the 

distribution of approved applicants 

across cohort years, the Department 

equally weighted the distributions 

observed under submitted applications 

for relief under the HEROES Act Plan 

that was announced in August 2022 and 

borrowers who ever defaulted on loans 

based on Department data. To calculate 

the distribution of borrowers across risk 

groups, the Department equally 

weighted the distributions observed 

under submitted applications for relief 

under the HEROES Act Plan that was 

announced in August 2022 and 

borrowers who had a qualifying 

hardship forbearance or deferment. If a 

cell reached 100 percent of sampling in 

current Department data, the excess 

approved applicants were distributed 

within the respective cohort range row 

by weight. The resulting estimated 


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distribution of approved applicants is 

shown in Table 4.2. 

TABLE 4.2—ESTIMATED PERCENTAGE DISTRIBUTION OF APPROVED APPLICANTS BY COHORT AND RISK GROUP

Nonconsolidated Consolidated 

non-default 

Consolidated 

default 

Total 

2-Yr 

Proprietary 2-Yr Public 4-Yr PubPri FrSo 

4-Yr PubPri 

JrSr Grad 

1994–2004 ........................ 0.6 0.2 1.3 1.3 1.4 3.5 0.9 9.1 

2005–2009 ........................ 0.7 0.7 2.1 3.2 1.6 2.5 0.6 11.5 

2010–2014 ........................ 2.3 2.4 6.9 10.5 5.1 8.3 2.1 37.4 

2015–2019 ........................ 1.8 1.8 5.2 7.9 3.8 6.3 0.9 27.6 

2020–2024 ........................ 0.9 0.9 2.8 4.2 2.0 3.3 0.1 14.3 

Total ........................... 6.3 6.0 18.2 27.1 13.8 23.9 4.6 100.0 

Next, we randomly identified nondefaulted, non-IDR borrowers within 

each risk group and cohort year cell, 

based on the percentages shown in 

Table 4.2, to be in the approved 

applicant pool. We then waived the 

assumed future balances in the sample 

to generate the estimated increase in 

DDB claims or reduction in collections 

associated with the hardship 

application provisions. To provide a 

maximally conservative budget 

estimate, we assumed all of these 

approvals would result in full relief. 

Lesser amounts of relief would reduce 

the estimated cost. 

Table 4.3 shows the outstanding loan 

balances by risk group for approved 

borrowers from existing cohorts that 

entered repayment by 2024. 

TABLE 4.3—OUTSTANDING LOAN

BALANCES BY RISK GROUP

[$ Millions] 

Risk group Outstanding 

loan balances 

2-Yr Proprietary .................... 835 

2-Yr Public ............................ 1,103 

4-Yr PubPri FrSo .................. 6,099 

4-Yr PubPri JrSr ................... 5,680 

Grad ...................................... 5,034 

Consol ................................... 7,523 

Total ............................... 26,275 

The sampling process described above 

generated the estimated forgiveness for 

borrowers from existing cohorts for 

loans that entered repayment by 2024. 

For future cohorts and loans that enter 

repayment in 2025 and later from 

existing cohorts, we calculated the 

percent of net volume that was 

associated with borrowers that entered 

repayment by 2024 assigned to receive 

forgiveness by origination cohort, 

consolidation status, budget risk group, 

and time to receiving hardship 

forgiveness from entering repayment 

(offset). We then took the average 

forgiveness percentage of volume across 

origination cohorts by risk group, 

consolidation status, and offset to 

estimate the percent of volume that will 

enter repayment from 2025 and out that 

we estimate will receive hardship 

forgiveness. As we expect it will take 

borrowers some years in repayment to 

demonstrate persistent hardship, we 

have distributed forgiveness in the 

outyears evenly from years 5 to 15 in 

repayment. This estimated forgiveness 

is then summarized by origination 

cohort, consolidation status, budget risk 

group, loan type, and offset and added 

to the baseline estimate for the 

discharge assumption to generate the 

cost of § 30.91(d). 

The Department also considered how 

to estimate how many applications it 

would receive, and the rate at which an 

application for waiver would be likely 

to be approved. 

As described previously, we assume 

that for every two borrowers who are 

eligible, there is one that is rejected 

because their needs are met via other 

Department payment relief options, 

such as IDR plans. We also assume that 

there would be borrowers who apply 

but do not meet the standard. On net, 

we assume that for every eligible 

applicant, there is also one ineligible 

applicant, for an effective approval rate 

of 50 percent. The Department seeks 

feedback about these assumed approval 

rates, and we will continue to refine this 

estimate. 

5. Accounting Statement 

As discussed in OMB Circular A–4, 

we have prepared an accounting 

statement showing the classification of 

the expenditures associated with the 

provisions of these proposed 

regulations. Table 5.1 provides our best 

estimate of the changes in annual 

monetized transfers that may result from 

these proposed regulations. 

Expenditures are classified as 

transfers from the Federal government 

to affected student loan borrowers. 

TABLE 5.1—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES

[In millions] 

Reduction in loans that are unlikely to be repaid in full in a reasonable period ................................................................................

Increased ability for borrowers to repay loans on which they have or are experiencing hardship ....................................................

Reduced administrative burden for Department due to reduced servicing, default, and collection costs .........................................

Category: 

Paperwork Reduction Act burden on borrowers to complete applications .................................................................................. $11.14 

Administrative costs to Federal government to update systems and contracts to implement the proposed regulations ........... $2.5

Administrative costs of staff reviews ............................................................................................................................................ $12.1 

Reduced transfers from borrowers due to waivers: ..................................................................................................................... 2% 

Based on high likelihood of being in default ................................................................................................................................ $7,657 

Based on applications .................................................................................................................................................................. $4,432 


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6. Alternatives Considered 

The Department considered the 

option of not proposing these 

regulations, as the Secretary has existing 

waiver authority under sections 

432(a)(6) and 468(2) of the HEA. 

However, we believe these regulations 

are important to inform the public about 

how the Secretary would exercise this 

longstanding discretionary waiver 

authority in a consistent and transparent 

manner. The Department believes that 

foregoing these proposed regulations 

would reduce transparency about the 

Secretary’s discretionary use of waiver. 

For all the reasons detailed above, 

hardship waivers would produce 

substantial, critical benefits for 

borrowers and the Department. Overall, 

as discussed above in the context of the 

relevant Executive Orders, the 

Department’s analysis suggests that the 

benefits of the proposed regulations will 

outweigh their costs. 

As part of the development of these 

proposed regulations, the Department 

engaged in a negotiated rulemaking 

process in which we received comments 

and proposals from non-Federal 

negotiators representing numerous 

impacted constituencies. These 

included higher education institutions, 

legal assistance organizations, consumer 

advocacy organizations, student loan 

borrowers, civil rights organizations, 

State officials, and State attorneys 

general. Non-Federal negotiators 

submitted a variety of proposals relating 

to the issues under discussion. 

Information about these proposals is 

available on our negotiated rulemaking 

website at https://www2.ed.gov/policy/ 

highered/reg/hearulemaking/2023/ 

index.html. 

Because the negotiators reached 

consensus on the proposed regulations 

in this NPRM, the Department did not 

consider alternative regulations in the 

drafting of this NPRM. We did, 

however, consider some alternatives 

during the negotiated rulemaking 

process. 

The Department considered including 

the issue of borrowers affected by 

servicer errors as a potential sign of 

hardship. However, we decided not to 

explicitly include that as a factor under 

proposed § 30.91(b) because the 

Department has existing procedures to 

address administrative errors without 

needing these specific regulations for 

them. 

The Department also considered using 

an exclusive list of factors indicating 

hardship in proposed § 30.91(b) but 

concluded that a non-exhaustive list 

would provide necessary flexibility to 

consider unanticipated factors 

indicating hardship and to incorporate 

new types of data as they become 

available. 

As noted above, the Committee 

reached consensus on the regulatory 

language proposed in this NPRM. 

7. Regulatory Flexibility Act 

The Secretary certifies, under the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.), that this final regulatory action 

would not have a significant economic 

impact on a substantial number of 

‘‘small entities.’’ 

These regulations will not have a 

significant impact on a substantial 

number of small entities because they 

are focused on arrangements between 

the borrower and the Department. They 

do not affect institutions of higher 

education in any way, and those entities 

are typically the focus on the Regulatory 

Flexibility Act analysis. As noted in the 

Paperwork Reduction Act section, 

burden related to the final regulations 

will be assessed in a separate 

information collection process and that 

burden is expected to involve 

individuals. 

8. Paperwork Reduction Act 

As part of its continuing effort to 

reduce paperwork and respondent 

burden, the Department provides the 

general public and Federal agencies 

with an opportunity to comment on 

proposed and continuing collections of 

information in accordance with the 

Paperwork Reduction Act of 1995 (PRA) 

(44 U.S.C. 3506(c)(2)(A)). This helps 

make certain that the public 

understands the Department’s collection 

instructions, respondents can provide 

the requested data in the desired format, 

reporting burden (time and financial 

resources) is minimized, collection 

instruments are clearly understood, and 

the Department can properly assess the 

impact of collection requirements on 

respondents. 

Proposed § 30.91 in this NPRM 

contains information collection 

requirements. Under the PRA, the 

Department would, at the required time, 

submit a copy of these sections and an 

Information Collections Request to the 

Office of Management and Budget 

(OMB) for its review. 

A Federal agency may not conduct or 

sponsor a collection of information 

unless OMB approves the collection 

under the PRA and the corresponding 

information collection instrument 

displays a currently valid OMB control 

number. Notwithstanding any other 

provision of law, no person is required 

to comply with, or is subject to penalty 

for failure to comply with, a collection 

of information if the collection 

instrument does not display a currently 

valid OMB control number. In the final 

regulations, we would display the 

control numbers assigned by OMB to 

any information collection requirements 

proposed in this NPRM and adopted in 

the final regulations. 

Section 30.91—Waiver due to likely 

impairment of borrower ability to repay 

or undue costs of collection. 

Requirements: The NPRM proposes to 

add a new § 30.91 to 34 CFR part 30 in 

which the Secretary would consider 

granting a waiver for borrowers 

experiencing hardship. To implement 

proposed § 30.91(d), the Department 

would use an ‘‘additional relief’’ process 

using a holistic assessment approach, 

where the Department would consider 

information provided by a borrower 

through an application, based on a nonexclusive list of factors in proposed 

§ 30.91(b), indicating that they are 

experiencing hardship. Information 

would include items such as a 

borrower’s household income and 

assets, payments on debt relative to 

household income, and exceptional 

amounts of costs for caretaking. 

While some of the information in 

proposed § 30.91(b) could be obtained 

from the Department’s administrative 

data, other information must be 

obtained from the borrowers themselves 

through an application. The information 

collected on the application would be 

used to assess eligibility for a hardship 

determination. The Department expects 

that the application for relief under 

proposed § 30.91(d) would solicit a 

range of qualitative and quantitative 

information from the borrower to inform 

the Department’s determination of 

whether the borrower satisfies the 

hardship standard. 

Burden Calculations: 

§ 30.91 Waiver due to likely 

impairment of borrower ability to repay 

or undue costs of collection. 

The proposed regulatory changes 

would add burden to borrowers and 

would require a new information 

collection. As discussed in the net 

budget impact section, we estimate that 

between 2.67 million and 8 million 

borrowers would submit hardship 

applications. The costs are estimated 

using the median hourly wage of $23.11 

reported by the Bureau of Labor 

Statistics for all occupations.103 We 

estimated the number of hours needed 

to complete the proposed application 

based upon discussions with 

Department staff that have worked on 

similar processes in the past. Through 

those conversations, we estimate that it 


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would take a typical borrower 1 hour to 

complete the application form to 

indicate they want to pursue the 

application-based process. The 

Department’s two closest analogous 

types of application forms are the one 

that borrowers submit when filing a 

borrower defense to repayment 

application and the one that borrowers 

fill out to document their income and 

expenses when seeking to rehabilitate a 

defaulted loan. For borrower defense 

forms, the Department estimates that it 

takes a borrower 30 minutes (0.5 hours) 

to complete, while the rehabilitation 

form takes an estimated 60 minutes (1 

hour) per borrower. We anticipate that 

the application form for the proposed 

hardship waiver would likely take as 

long as the rehabilitation form to fill 

out. We came to this conclusion because 

borrowers who want to provide 

information about indicators of 

hardship from their finances or assets 

may need to provide supplemental 

financial information. Applicants may 

have to put together documentation 

related to high essential expenses, such 

as health care or dependent care costs. 

They may also need to provide 

information about how they are 

experiencing hardship as a result of the 

items identified and why it is likely to 

persist. 

Because we do not want to double 

count borrowers who may qualify for 

and receive relief under proposed 

§ 30.91(c), the estimate for proposed 

§ 30.91(d) illustrated below does not 

include borrowers who would be 

expected to receive full relief under 

proposed § 30.91(c). 

These figures and considerations are 

the basis for the following estimations. 

§ 30.91 Hardship Application—OMB 

Control Number 1845–NEW 

Affected entity Applications Burden hours 

Cost 

$22.31 

per hour 

Individual low scenario ................................................................................................................ 2,667,000 2,667,000 59,500,770 

Individual medium scenario ......................................................................................................... 4,000,000 4,000,000 89,240,000 

Individual high scenario ............................................................................................................... 8,000,000 8,000,000 178,480,000 

Average Total ....................................................................................................................... 4,889,000 4,889,000 109,073,590 

Consistent with the discussions 

above, the following chart describes the 

sections of the proposed regulations 

involving information collections, the 

information being collected and the 

collections that the Department would 

submit to OMB for approval and public 

comment under the PRA, and the 

estimated costs associated with the 

information collections. The monetized 

net cost of the increased burden for 

borrowers using wage data was 

developed using Bureau of Labor 

Statistics (BLS) data. For individuals, 

we have used the median hourly wage 

for all occupations, $23.11 per hour 

according to BLS.104

COLLECTION OF INFORMATION

Regulatory 

section Information collection OMB control number and estimated burden 

Estimated cost 

$23.11 

per hour 

§ 30.91 ........... Would allow the Secretary to receive applications that provide information for the Secretary to conduct hardship determinations..1845–NEW 4,889,000 average 

hours.

$109,073,590 

Total ........ .................................................................................................................... 1845–NEW 4,889,000 ..................... 109,073,590 

If you wish to review and comment 

on the Information Collection Requests, 

please follow the instructions in the 

ADDRESSES section of this notification. 

Note: The Office of Information and 

Regulatory Affairs in OMB and the 

Department review all comments posted 

at www.regulations.gov. 

In preparing your comments, you may 

want to review the Information 

Collection Request, including the 

supporting materials, in 

www.regulations.gov by using the 

Docket ID number specified in this 

notification. This proposed collection is 

identified as proposed collection 1845– 

NEW. 

We consider your comments on these 

proposed collections of information in— 

• Deciding whether the proposed 

collections are necessary for the proper 

performance of our functions, including 

whether the information will have 

practical use. 

• Evaluating the accuracy of our 

estimate of the burden of the proposed 

collections, including the validity of our 

methodology and assumptions. 

• Enhancing the quality, usefulness, 

and clarity of the information we 

collect; and 

• Minimizing the burden on those 

who must respond. 

Consistent with 5 CFR 1320.8(d), the 

Department is soliciting comments on 

the information collection through this 

document. Between 30 and 60 days after 

publication of this document in the 

Federal Register, OMB is required to 

make a decision concerning the 

collections of information contained in 

these proposed priorities, requirements, 

definitions, and selection criteria. 

Therefore, to make certain that OMB 

gives your comments full consideration, 

it is important that OMB receives your 

comments on these Information 

Collection Requests by December 2, 

2024. 

9. Intergovernmental Review 

This program is subject to Executive 

Order 12372 and the regulations in 34 

CFR part 79. One of the objectives of the 

Executive Order is to foster an 

intergovernmental partnership and a 

strengthened Federalism. The Executive 

order relies on processes developed by 

State and local governments for 

coordination and review of proposed 

Federal financial assistance. 


lotter on DSK11XQN23PROD with PROPOSALS3
Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Proposed Rules 87163 

This document provides early 

notification of our specific plans and 

actions for this program. 

10. Assessment of Education Impact 

In accordance with section 411 of the 

General Education Provisions Act, 20 

U.S.C. 1221e–4, the Secretary 

particularly requests comments on 

whether these final regulations would 

require transmission of information that 

any other agency or authority of the 

United States gathers or makes 

available. 

11. Federalism 

Executive Order 13132 requires us to 

provide meaningful and timely input by 

State and local elected officials in the 

development of regulatory policies that 

have Federalism implications. 

‘‘Federalism implications’’ means 

substantial direct effects on the States, 

on the relationship between the 

National Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. The proposed 

regulations do not have Federalism 

implications. 

Accessible Format: On request to the 

program contact person(s) listed under 

FOR FURTHER INFORMATION CONTACT, 

individuals with disabilities can obtain 

this document in an accessible format. 

The Department will provide the 

requestor with an accessible format that 

may include Rich Text Format (RTF) or 

text format (txt), a thumb drive, an MP3 

file, braille, large print, audiotape, or 

compact disc, or another accessible 

format. 

Electronic Access to This Document: 

The official version of this document is 

the document published in the Federal 

Register. You may access the official 

edition of the Federal Register and the 

Code of Federal Regulations at 

www.govinfo.gov. At this site you can 

view this document, as well as all other 

documents of this Department 

published in the Federal Register, in 

text or Adobe Portable Document 

Format (PDF). To use PDF, you must 

have Adobe Acrobat Reader, which is 

available free at the site. 

You may also access documents of the 

Department published in the Federal 

Register by using the article search 

feature at www.federalregister.gov. 

Specifically, through the advanced 

search feature at this site, you can limit 

your search to documents published by 

the Department. 

Miguel Cardona, 

Secretary of Education. 

For the reasons discussed in the 

preamble, the Secretary of Education 

proposes to revise part 30 of title 34 of 

the Code of Federal Regulations as 

follows: 

List of Subjects in 34 CFR Part 30 

Claims, Income taxes. 

For the reasons discussed in the 

preamble, the Department of Education 

proposes to amend 34 CFR part 30 to 

read as follows: 

PART 30—DEBT COLLECTION 

■ 1. The authority citation for part 30 

continues to read as follows: 

Authority: 20 U.S.C. 1221e–3(a)(1), and 

1226a–1, 31 U.S.C. 3711(e), 31 U.S.C. 3716(b) 

and 3720A, unless otherwise noted. 

■ 2. Add subpart G, consisting of § 30.91 

to read as follows: 

Subpart G—Waiver of Federal Student 

Loan Debts 

§ 30.91 Waiver due to likely impairment of 

borrower ability to repay or undue costs of 

collection. 

(a) Standard for waiver due to 

hardship. The Secretary may waive up 

to the outstanding balance of a loan 

owed to the Department arising under 

the Federal Family Education Loan 

Program authorized under title IV, part 

B, of the HEA, the William D. Ford 

Federal Direct Loan Program authorized 

under title IV, part D, of the HEA, the 

Federal Perkins Loan Program 

authorized under title IV, part E, of the 

HEA, and the Health Education 

Assistance Loan Program authorized by 

sections 701–720 of the Public Health 

Service Act, 42 U.S.C. 292–292o, when 

the Secretary determines that a borrower 

has experienced or is experiencing 

hardship related to such a loan such 

that the hardship is likely to impair the 

borrower’s ability to fully repay the 

Federal government or the costs of 

enforcing the full amount of the debt are 

not justified by the expected benefits of 

continued collection of the entire debt. 

(b) Factors that substantiate hardship. 

In determining whether a borrower 

meets the conditions described in 

paragraph (a) of this section, the 

Secretary may consider any indicators 

of hardship related to the borrower, 

including but not limited to— 

(1) Household income; 

(2) Assets; 

(3) Type of loans and total debt 

balance owed for loans described in 

paragraph (a) of this section, including 

those not owed to the Department; 

(4) Current repayment status and 

other repayment history information; 

(5) Student loan total debt balances 

and required payments, relative to 

household income; 

(6) Total debt balances and required 

payments, relative to household income; 

(7) Receipt of a Pell Grant and other 

information from the FAFSA form; 

(8) Type and level of institution 

attended; 

(9) Typical student outcomes 

associated with a program or programs 

attended; 

(10) Whether the borrower has 

completed any postsecondary certificate 

or degree program for which they 

received title IV, HEA financial 

assistance; 

(11) Age; 

(12) Disability; 

(13) Age of the borrower’s loan based 

upon first disbursement, or the 

disbursement of loans repaid by a 

consolidation loan; 

(14) Receipt of means-tested public 

benefits; 

(15) High-cost burdens for essential 

expenses, such as healthcare, 

caretaking, and housing; 

(16) The extent to which hardship is 

likely to persist; and 

(17) Any other indicators of hardship 

identified by the Secretary. 

(c) Immediate relief for borrowers 

likely to default. The Secretary may 

consider any indicators of hardship 

related to the borrower, including but 

not limited to the factors described in 

paragraph (b) of this section to waive all 

or part of the federally held student 

loans of borrowers who the Secretary 

determines based on data in the 

Secretary’s possession have experienced 

or are experiencing hardship such that 

their loans are at least 80 percent likely 

to be in default in the next two years 

after October 31, 2024. 

(d) Process for additional relief. In 

exercising the authority described in 

paragraph (a) of this section, the 

Secretary may rely on data in the 

Secretary’s possession that may have 

been acquired through an application or 

any other means to provide relief, 

including automated relief, based on 

criteria demonstrating the conditions 

described in paragraph (a) of this 

section. 

[FR Doc. 2024–25067 Filed 10–30–24; 8:45 am] 

BILLING CODE 4000–01–P 


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