Skip to main content

AG Nessel Joins Multistate Coalition Urging Department of Education to Provide Debt Relief to Federal Student Loan Borrowers

LANSING – Michigan Attorney General Dana Nessel joined a coalition of 19 attorneys general calling on the U.S. Department of Education (Department) 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. 

“Too many student loan borrowers are trapped in unmanageable debt and pushed into critical financial straits such as default, garnishment, or loss of earned income tax credits,” Nessel said. “The Department of Education’s proposed regulations would address these hardships for many, and I stand firmly with my colleagues in urging the Department to provide the much-needed assistance to borrowers struggling under massive student loan debt.”

In a comment letter (PDF) 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 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 30th 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 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 (PDF).

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

###

Media Contact: