Rep. Wild Leads Letter to Department of Education Advocating on Behalf of Student Loan Borrowers

November 12, 2021
Press Release

Washington, D.C. -- Today, Representative Susan Wild (PA-07) led a group of her colleagues in sending a letter to Secretary of Education Miguel Cardona to urge him to take necessary steps to support and protect student loan borrowers. The Department of Education is spending this Fall and Winter engaged in a public negotiated rulemaking process to discuss changes to higher education policy, including updates to federal student loan repayment plans. Through this process, the Department of Education has an opportunity to make higher education more affordable and accessible for students and their families.


The lawmakers wrote: “To expand access to higher education and protect student loan borrowers, we must address the burden and difficulties that are faced by the more than 40 million student loan borrowers who collectively hold over $1.5 trillion in student loan debt. Adding to this overwhelming burden, there are currently eight different federal loan repayment options for borrowers, which can make it difficult for borrowers to understand their options and choose the best repayment plan for their circumstances. As a result of this confusion, many borrowers end up in repayment plans that burden them with unaffordable monthly loan payments and then struggle to make progress toward repaying their loans.”


The lawmakers continued: “A fundamental way to address this situation is to ensure that income-driven repayment plans are more accessible and affordable for borrowers. These repayment plans support borrowers by tying monthly loan payments to a borrower’s income, capping the loan payments at a small percentage of the borrower’s discretionary income, and providing loan forgiveness on the remaining loan balance after a decade or more of on-time repayments. With this approach, we can better support borrowers as they make payments on their loans, reduce their likelihood of defaulting on their student loan debt, keep good credit, and establish a career path after graduation.”


Specifically, the letter outlines several ways the Department of Education can support borrowers, including:


•     Simplifying the enrollment of student loan borrowers in income-driven repayment plans by sunsetting current income-driven repayment plans and creating a new, more generous income-driven repayment plan. This will alleviate the burden on borrowers to navigate the complex student loan repayment system alone and steer them toward a plan that has a higher chance of supporting their successful loan repayment.

•     Capping monthly student loan payments at not more than 10 percent of student loan borrowers’ discretionary income.

•     Calculating discretionary income including only an amount equal to 250 percent of the federal poverty line or at least 200 percent of the federal poverty line based on the borrower’s family size.

•     Allowing borrowers who earn less than 250 percent or at least 200 percent of the federal poverty line to make monthly loan payment amounts of zero until their earnings improve and count these months toward eventual loan forgiveness.

•     Forgiving any remaining loan debt after not more than 20 years of payments are made in an income-driven repayment plan. Additionally, this loan forgiveness should not be considered taxable income.

•     Prioritizing robust communication with borrowers to ensure they are informed about their repayment options and about the benefits of income-driven loan repayment plans.

•     Increase transparency, oversight, and accountability of student loan servicers, to ensure borrowers are informed about their loan repayment options and the benefits of income-driven repayment plans.



Rep. Wild was joined by Rep. Nikema Williams (GA-05), Rep. Sheila Jackson Lee (TX-18), Rep. Grace Meng (NY-06), Rep. Linda Sánchez (CA-38), Rep. Jahana Hayes (CT-05), Rep. Alan Lowenthal (CA-47), Rep. Madeleine Dean (PA-04), Rep. John B. Larson (CT-01) in sending the letter.


The full text of the letter is available here.