Legal assistance groups that provide free legal assistance to low-income people submitted these group comments in response to the Department of Education’s proposal to implement changes made by the One Big Beautiful Bill Act (“OBBB”) to rules governing federal student loan repayment, deferrals related to economic hardship and unemployment, and rehabilitation of student loans out of default.
These comments are informed by the experiences of legal assistance attorneys across the country who help low-income people struggling with student debt to navigate their student loan repayment options and seek redress for errors.
Legal aid groups are concerned that these changes, including changes required by Congress, will increase student loan distress and defaults. To reduce harm to people struggling to afford student loan debt, the groups recommend the following:
- Collect data and improve practices during implementation of these major changes to protect low-income borrowers at risk of default;
- Provide time-sensitive communication as soon as possible to borrowers who are losing key rights to affordable income-driven repayment;
- Clarify the rights of borrowers with Parent PLUS loans who consolidate by July 1, 2026 to access Income-Based Repayment (“IBR”);
- Clarify the rights of borrowers with FFEL loans who take out new Direct Loans to continue repaying their FFEL loans in IBR and to have their income-based FFEL and Direct Loan payments adjusted to reflect their full loan obligations;
- Clarify that REPAYE and SAVE payments made before July 1, 2028 constitute qualifying payments toward IBR forgiveness;
- Ensure that borrowers who make early or extra payments in RAP are not penalized for doing so and do not experience balance growth; and
- Increase access to and successful completion of rehabilitation out of default, including by creating an online rehabiltiation process.
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