US education secretary seeks public comment on plan to reduce student loan debt
WASHINGTON (Gray DC) – For many American families and students, a college degree comes with the burden of student loan debt.
Today US Education Secretary Miguel Cardona says he is working to fix a system that has been described as ‘broken’. He asks the public to weigh in over the next 30 days on a new to plan by the US Department of Education to relieve many Americans.
“The president said it very clearly when I became secretary. Fix the broken system so that more Americans can access higher education without being in debt or afraid of the process. The system was broken. Right? This ad so is really a step to make sure that we keep our borrowers front and center, we keep our students front and center,” Cardona said.
The new proposed regulations focus on stopping predatory practices and giving borrowers more options. The proposed rules also seek to end the capitalization of interest that occurs when unpaid interest is added to the principal balance of a loan. The regulations also aim to expand the number of students eligible for public service loan forgiveness.
“Civil service loan cancellation is for civil servants, isn’t it? Teachers, nurses, people who choose public service not because of the money, but because they want to improve their community. This was to give these people loan forgiveness so they wouldn’t spend the rest of their lives repaying loans when serving the public,” Cardona said. “And we widen the net, if you will, of those who are eligible. For example, there are doctors who choose to serve in a non-profit hospital rather than going into the private sector or private practice where they earn more, they go into public service. So we want them to be eligible as well.
Another facet of the proposal is to ease the burdens of borrowers whose schools have closed or lied to them. This includes giving borrowers more options to have a day in court if they have ongoing disputes with their colleges.
“We are now protecting people who have gone into this field, who have loans, but their schools have lied to them about what they can do when they graduate. So these people have loans that they have to repay. The institutions they went to misled them. We also want to give loan forgiveness to these people,” Cardona said. “Another really important thing I want to mention here – we’ve heard loud and clear from Americans across the country that interest capitalization is a problem. The interest that accrues on these loans often buries these people where they can’t find a home or where they can’t move forward in life because interest has accrued We try to prevent interest accruing We are not trying to make money from loans here. We want our people who graduate to get their education, pay off their loans in a way that they’re not tied to them for the rest of their lives, and get on with their lives. That’s what we’re trying to do here with this announcement.
Read all the details of the new proposals here.
Anyone wishing to weigh in on the new proposal can do so at regulations.gov.
The US education secretary added that he urges anyone who thinks they might qualify for a public service loan forgiveness to check studentaid.gov immediately because he said they might be eligible for help right now.
“My goal is not just to get some debt relief, but to fix a system that’s been broken that perpetuates the haves and the have-nots in this country. So day one, public service, debt forgiveness. We let’s fix this defense of the borrower. We have worked very hard. You have heard the announcement of Corinthian. We simplify the process. We reorganize FSA (Federal Student Aid) We have a functioning law enforcement unit. The system needs to be better so more Americans can access it,” Cardona said.
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