PHOENIX – Arizona Attorney General Kris Mayes is joining a coalition of 22 state attorneys general in submitting comments to the U.S. Department of Education in response to proposed changes to the Income-Driven Repayment (IDR) program.
IDR plans enable borrowers to make payments based on income and family size and offer the possibility of loan forgiveness after 20 or 25 years of qualifying payments.
In their letter to Secretary Miguel Cardona, the coalition applauds the Department for proposing “meaningful improvements” to IDR and emphasizes that the proposed regulatory reforms will make monthly IDR payments more affordable, eliminate enrollment disincentives, help borrowers avoid ballooning loan balances, and prevent needless defaults.
In addition to these significant improvements, the letter also calls on the Department to expand relief to parent borrowers and defaulted borrowers and to adopt additional measures to remedy past harms and ensure the program’s success moving forward.
As the coalition explains in the letter, IDR plans, which first became available in the 1990s, were intended to ensure that borrowers’ monthly payments would be affordable and that borrowers would not be saddled for life with student loan debt. However, existing IDR plans have failed to meet these goals due to faulty servicing, needless administrative complexity, and design flaws.
In their letter, the coalition also calls upon the Department to adopt additional measures to ensure that IDR will benefit more borrowers, including:
- Making consolidated Parent PLUS loans eligible for the most affordable repayment plan—Revised Pay As You Earn (REPAYE);
- Creating a simpler path for borrowers in default to enroll in IDR;
- Counting all past forbearance and repayment periods and certain deferment periods toward IDR loan forgiveness; and
- Expanding the reach of the Department’s proposals to provide retroactive relief to borrowers who have suffered from the historic mismanagement of the federal loan repayment system.
In addition to the newly proposed IDR plan, the U.S. Department of Education has announced other debt relief initiatives to address the past problems with of IDR, including the One-Time IDR Adjustment. Through the One-Time IDR Adjustment, borrowers whose loans are owned by the U.S. Department of Education can receive credit toward IDR loan forgiveness for past repayment periods and certain deferment and forbearance periods—even if they have never previously enrolled in IDR, potentially enabling them to receive forgiveness much sooner. Federal loans that are privately owned must be consolidated into the Direct Loan Program by May 1, 2023, to benefit from the One-Time IDR Adjustment.
A full copy of the letter can be found here.
Joining General Mayes in issuing this letter, are the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, New Mexico, Oregon, Pennsylvania, Rhode Island, South Dakota, Washington, Wisconsin, and Vermont.