The Education Department unveiled a list of proposals to reform student-loan programs.
23 Democratic senators commended the proposals, and pushed for even more debt relief.
This comes as borrowers wait for news on broad loan forgiveness and a payment-pause extension.
President Joe Biden's Education Department got a gold star from nearly two dozen Democratic senators on its efforts to reform student-loan programs.
In July, the department unveiled a list of regulatory proposals aimed at fixing longstanding issues in the student-loan industry, like easing requirements for targeted loan-forgiveness programs for public servants and borrowers with disabilities, along with preventing interest from spiraling on debt balances.
Last week, 23 Democratic senators — including Senate Majority Leader Chuck Schumer and Massachusetts Sen. Elizabeth Warren — wrote a letter to Education Secretary Miguel Cardona commending him on his department's efforts and urging him to do more to protect borrowers.
"For far too long, students who face a variety of barriers have been cheated by predatory for-profit colleges, denied their day in court due to mandatory arbitration agreements, and denied debt relief because of standards that are impossible to meet," the lawmakers wrote. "Borrowers have seen their balances balloon due to interest capitalization, they have had their lives altered by sudden college closures, and they have faced burdensome and overly-complicated requirements to access debt relief.
"This proposal represents an enormous step forward for students and borrowers, and, when finalized, it will help ensure government benefits and programs function as Congress intended," they added.
The lawmakers commented on key areas the department proposed to improve, including the Public Service Loan Forgiveness — or PSLF — program, debt relief for borrowers whose for-profit schools defrauded them, and total and permanent disability discharges, all of which critics have denounced in the past over burdensome paperwork requirements and flaws in loan-company management within the programs that have blocked eligible borrowers from accessing student-loan forgiveness.
As Insider previously reported, the department proposed simplifying the targeted loan-forgiveness programs and removing some paperwork requirements. With regards to PSLF, for example, the proposal included broadening the scope of jobs that would qualify for relief and giving borrowers more flexibility by allowing partial payments to count toward forgiveness, which the Democratic lawmakers said were "critical improvements."
However, they also noted that these proposals build on a temporary waiver the department announced in October that would allow any past payments to count toward forgiveness progress, and they urged for an extension of that waiver past October 31, 2022 "to align with the implementation of the new changes being made under the Department's forthcoming rules."
When it comes to programs like the borrower defense to repayment, which are claims borrowers can file if they believe they were defrauded by a for-profit school, the lawmakers want the department to take that relief a step further. They pushed for legal assistance for borrowers who file those claims, along with ceasing interest accrual for all borrowers with pending claims.
The Education Department has not yet commented on the lawmakers' letter, but it comes at a crucial time for millions of federal borrowers. Student-loan payments are set to resume in just over two weeks, and borrowers and student-loan companies alike are waiting for news on an additional extension of the payment pause. Biden is also expected to announce whether he will cancel student debt broadly before Aug. 31, with him reportedly considering $10,000 in relief for borrowers making under $150,000 a year.
The White House has confirmed Biden will stick to his Aug. 31 timeline, leaving borrowers at the edges of their seats waiting to see if he will cut their debt balances.
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