CRL submitted a comment on the Proposed Rule by the U.S. Department of Education on Student Debt Relief 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.

The Proposed Rule is critically important to Black, Latino and low to moderate income (LMI) communities because its enactment will substantially reduce or eliminate loan debt and support wealth building and financial stability that has evaded too many borrowers. Waivers in the Proposed Rule correct long-standing practices of capitalizing interest without explicit statutory mandate, which has harmed and hampered borrowers by unnecessarily inflating their loan balances. The Proposed Rule is fully supported by the Supreme Court’s recent decision in Biden v. Nebraska because the specific authority to waive, compromise or release debt in any amount is clearly spelled out and authorized by the Higher Education Act. CRL recommends that waivers of interest are expanded so the Department of Education not only returns income-driven repayment (IDR) borrowers to their original balance per the Proposed Rule, but that Department of Education ensures borrowers are also refunded any additional interest accrued upon their overinflated balances.

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