Convening for an unusual fourth time, the Department of Education’s final Student Loan Debt negotiated rulemaking reached consensus on defining the circumstances under which a student loan borrower would qualify for a proposed “hardship” waiver. Negotiators agreed on edits to the Department’s draft language and reached consensus on the final language quickly.

The proposed waiver included 17 separate provisions that could contribute to the overall assessment of a borrower’s hardship, including one that provides the Secretary with the discretion to consider “any other indicators of hardship” - a powerful tool that negotiators vocally supported early on to ensure the authority covered as many potential borrowers as possible.

The Department brought negotiators back to the table this week to work through the complicated definitions required to reach its goal of providing broad, flexible pathways to student loan debt forgiveness for borrowers who are experiencing hardship significant enough to impair their ability to repay their debt.

To provide this relief, the Department’s proposal included a predictive model that would immediately provide one-time relief to borrowers who were at least 80% likely to default. This threshold would be derived from the model’s review of historical trends in defaults and would be automatically applied to eligible borrowers. Those who do not meet the threshold for automatic forgiveness would need to apply through a new process.

With the Student Loan Debt Relief negotiated rulemaking now complete, the next step is for the Department to publish its proposed rule and begin the public comment period. Once that is complete, the Department will need to publish its final rule before November 1, 2024, the deadline for new rules to go into effect on July 1, 2025.