Washington, D.C.— The Center for Responsible Lending (CRL) commended the U.S. Department of Education’s proposed rule on student debt relief based on hardship in a comment letter submitted to Secretary Cardona yesterday evening. The rule aims to provide targeted support to millions of vulnerable Americans who are at the greatest risk of default, including communities of color, older borrowers and Parent PLUS loan holders.
“The Department’s proposed rule is designed to avoid default and unnecessary collections costs, which affects both borrowers' and the Department of Education’s bottom line,” the letter stated. “It properly focused on relieving only the borrowers most in need of assistance and who have no other avenues for relief under other programs.”
CRL’s letter highlighted the authority of the Secretary to waive student loan debts under the Higher Education Act of 1965, a power granted by Congress to the Department of Education, and the critical need to consider Parent PLUS Borrowers under hardship determinations.
“Parent PLUS borrowers who take on student loans later in life to care for family members are a particularly concerning group,” said Nadine Chabrier, senior policy counsel at CRL. “Notably, Black and Latino families disproportionately rely on these loans and face financial distress due to limited repayment options. Many vulnerable borrowers continue to pay student loans into retirement, with thousands even seeing their Social Security benefits garnished.”
"This critical regulation provides a pathway for relief for millions of borrowers and could prevent generations of financial hardship for low-income families struggling under the weight of student loans,” Chabrier continued. “By addressing systemic issues in the loan program, the Department is creating a more equitable future.”
Additional Background
- According to the Department of Education, as of 2024, 3.3 million borrowers owe $107 Billion in Parent PLUS loans, close to 7% of the student debt total owed.
- According to the Consumer Financial Protection Bureau (CFPB), student loan delinquencies have surged 7.1% since the COVID-19 pandemic, affecting millions of Americans.
- A 2022 CRL and Morning Consult poll found that more than one-third of borrowers have struggled to make loan repayments and roughly a quarter report being unable to afford necessities like food, gas and/or clothing due to the cost of their student loans. It also found borrowers with older loans are more likely to have $10,000 or more above their original loan amount borrowed.
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Press Contact: Alfred King alfred.king@responsiblelending.org