Press Release  AG Campbell Urges Department of Education To Provide Debt Relief To Federal Student Loan Borrowers

Boston — Massachusetts Attorney General Andrea Joy Campbell has led a coalition of 19 attorneys general in calling on the U.S. Department of Education to swiftly implement recently proposed regulations, which would provide needed relief for some of the nation’s most burdened student loan borrowers and help address the student debt crisis. The proposed regulations would waive or reduce student loan repayment for certain groups of federal student loan borrowers.

“Meaningful debt relief is critical to addressing the ongoing national student debt crisis, which disproportionately impacts vulnerable low-income borrowers and communities of color, and deepens existing wealth gaps,” said AG Campbell. “I am proud to lead this multistate coalition in support of the Department of Education’s proposed regulations, which would provide much-needed financial relief to our nation’s most burdened borrowers. We urge the Department to implement these regulations as swiftly as possible in order to provide the most impactful relief to borrowers.”  

In a comment letter sent to the Department, the coalition underscores the critical need for meaningful debt relief to address the nationwide student debt crisis, which disproportionately burdens low-income borrowers and borrowers of color. Having worked on the frontlines of the crisis by advocating on behalf of student borrowers, the attorneys general submitting these comments have observed firsthand how historical and ongoing systemic failures of the federal student loan system have exacerbated and perpetuated the crisis. Drawing on these experiences, the coalition emphasizes the need for borrower relief and commends the Department for proposing regulations designed to help alleviate burdens for struggling borrowers. 

The coalition commends the Department for proposing the regulations, which would provide meaningful and targeted relief to specific groups of borrowers. Specifically, the Department’s proposed regulations are designed to provide critical debt relief to:  

• Borrowers who have seen their student loan balances balloon through accrued and capitalized interest, and borrowers with older loans. These borrowers have been especially burdened by the misconduct of student loan servicers and the Department’s previous misguided policy choices. 
• Cohorts of borrowers with commercially held loans taken out under the Federal Family Education Loan (FFEL) Program. The Department proposes a system by which certain cohorts of borrowers with commercially held FFELs may obtain debt relief. While FFELs stopped being issued in 2010, many borrowers with FFELs continue to be burdened by their debt. Specifically, many FFEL borrowers are in danger of missing the opportunity to consolidate their loans to access affordable income-driven repayment plans and loan forgiveness programs due to widespread servicer misconduct. Borrowers with FFELs must consolidate by June 30^th to benefit. Debt relief is particularly critical for these borrowers and the coalition encourages the Department to further extend such relief.  
• Borrowers who attended a school that failed to meet its obligations to students. Under the proposed regulations, the Department will provide debt relief to borrowers who attended schools that lost their Title IV eligibility as a result of institutional problems related to student outcomes, and schools that failed to provide sufficient value to their students according to Departmental determinations. These borrowers did not get the benefit of the education they were promised for the federal loans they took out and should not be left holding the bag for institutional failures. 
• Borrowers who would have been eligible for relief under other federal student loan programs, such as income-driven repayment plans and the Public Service Loan Forgiveness (PSLF) Program, but have not successfully enrolled in these programs, often due to the difficulties borrowers face navigating the complex federal loan repayment system. 

The groups of borrowers identified by the Department in the proposed regulations have endured some of the greatest burdens associated with student loan debt and require critical Department assistance. As such, the coalition urges the Department to effectuate this proposed relief as quickly as possible to provide the most impactful relief for borrowers.   

The comment letter in its entirety may be viewed here.  

In sending the letter, Massachusetts Attorney General Andrea Joy Campbell was joined by the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington. 

Yael Shavit, Chief of the Massachusetts Attorney General’s Consumer Protection Division, represented State Attorneys General as a negotiator on the Department’s rulemaking committee that considered these proposed regulations. 

This multistate letter is one of AG Campbell’s latest efforts to further one of her recently announced strategic priorities to advance opportunity for all across the Commonwealth, particularly through promoting economic opportunity and consumer justice for all. Since taking office last year, AG Campbell has taken a multitude of actions to assist borrowers and address and alleviate the national student debt crisis, which is a driving factor of wealth gaps and a significant impediment to economic mobility for marginalized communities, disproportionally impacting low-income and communities of color both in Massachusetts and nationwide.   

Most recently, earlier this month, AG Campbell, in conjunction with the Department, announced more than $80 million in federal student loan discharges for borrowers who attended the predatory for-profit Art Institutes, which made false and misleading claims to students. Earlier this year, AG Campbell announced a $1.8 million settlement with a major student loan servicer to resolve allegations that the company failed to properly communicate with borrowers about renewing affordable loan repayment plans. Furthermore, last fall, AG Campbell led a multistate coalition urging the Biden Administration to do more to protect borrowers during the resumption of federal student loan repayments and led a multistate amicus brief in support of stronger relief options for borrowers harmed by predatory institutions.  

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