New – Key Congressional leaders have agreed to reinstate Pell grants for incarcerated students as part of a deal on a package of higher ed policies expected to be included in year-end omnibus spending bill, per aides:
Deal would lift longtime ban on Pell for incarcerated students that Congress imposed in '94 crime law signed by Bill Clinton & championed by then-Sen. Biden.
House approved bill w/ provision eliminating ban on Pell for prisoners over the summer.
Broad coalition has backed the effort -- incl. NAACP, ACLU, FreedomWorks, business groups, faith-based orgs, prosecutors, corrections officials.
.@BetsyDeVosED expanded & championed the Obama-era Second Chance Pell pilot program--and has called for Congress to make it permanent
MORE higher ed policies expected in omnibus, per aides:
➡️ Simplifying FAFSA & aid formula
➡️ $1.3B in forgiveness of fed loans owed by HBCUs
➡️ Removing 150% limit on in-school interest subsidy on some loans
➡️ Restoring Pell eligibility for students defrauded by their college
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NEW: Biden admin officials are grappling with how to resume collecting student loan payments from millions of Americans – as a funding shortfall forces Ed Dept to cut customer service for borrowers.
Ed Dept officials, Dems, consumer groups worry the admin may not have enough money to smoothly transition borrowers back into repayment.
Reduced call center hours. Longer hold times. Potentially slower paperwork processing. Extra outreach for at-risk borrowers in limbo.
Biden admin has started actively planning for return to repayment.
Here’s what we know about the plans -- which are in flux and could change -- per sources familiar with planning & docs obtained under public records requests:
The extension is latest wrinkle in complicated reshuffling of @usedgov’s student loan servicing landscape this year.
But some longtime critics of Ed Dept’s handling student loan servicing see latest Navi extension as emblematic of “too big to fail” contractors at the agency.
.@usedgov declined for the past week to say whether it had extended Navient's contract.
Minutes before our story was published tonight, @usedgov posted the Sept. 24 contract extension on a federal procurement website:
Biden admin today is unveiling a series of policies aimed at boosting the number of public service workers who qualify for a troubled federal student loan forgiveness program -- responding to growing calls by unions & Democrats to fix it.
The changes move 550K+ public servicer workers closer -- by an average of 2yrs closer -- toward the 10 years’ worth of payments they need for loan forgiveness.
22K borrowers will immediately qualify for relief; another 27K could qualify w/ more paperwork.
@usedgov@FSACOO The announcement was made by the New Hampshire Higher Education Assistance Foundation (NHHEAF) Network, which is a trade name of the New Hampshire Higher Education Loan Corporation, which operates its loan servicing biz under the name Granite State Management & Resources. Got it?
Background on the bipartisan deal that's supposed to drastically reduce questions on the FAFSA (from 108 to 36) -- it was included in the year-end govt spending & covid relief deal that Trump signed in Dec.:
House Democrats are significantly scaling back the student loan forgiveness provisions in their $3T coronavirus relief package, citing concerns about the cost:
Initial plan would have provided up to $10K in loan forgiveness to all borrowers:
Revised plan would limit the $10K in loan forgiveness only to those borrowers who were “economically distressed” on the day *before* Trump declared a coronavirus national emergency (March 12).
Borrowers would be considered "economically distressed" if their monthly payment under an income-based repayment plan was zero. Borrowers who are delinquent or in default -- or in financial hardship deferment or forbearance -- also qualify.