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A select group of student loan debt holders could see their balances erased under a new proposal from lawmakers.
Nine members of Congress sent a letter to Education Secretary Miguel Cardona last week asking that Parent PLUS borrowers – a special kind of student loan that parents take out in their own name to help their children with college costs – get special loan forgiveness, Newsweek reported.
“Overall, options for relief for Parent PLUS borrowers remain extremely limited,” the lawmakers wrote. “Without addressing the intergenerational debt experienced by families with Parent PLUS loans, the Biden Administration will fall short of its commitments to fix our nation’s broken student loan system and to advance affordable access to higher education for all.
While Parent PLUS borrowers do qualify for one-time Income-Driven Repayment account adjustments, covering those who have been in repayment for at least 25 years, they are not eligible for the Savings on a Valuable Education, or SAVE plan, which offers some of the lowest monthly payments available.
The lawmakers are proposing SAVE be expanded to include Parent PLUS loan holders.
“The only IDR plan available to Parent PLUS borrowers is the income-contingent repayment plan, which requires borrowers to pay the highest share of discretionary income of all the IDR plans. We urge the Department of Education to revise its existing regulations to expand Parent PLUS borrower eligibility to more generous income-driven repayment plans, including the new SAVE program,” lawmakers said.
According to a fact sheet, there are currently 3.8 million Parent PLUS borrowers in the U.S., owing more than $112 billion and accounting for 13% of the total outstanding federal student loan debt. In 2020, the average Parent PLUS loan debt held by a student’s family member was $37,970, a 40% increase since 2000.
The letter was signed by Democratic Sens. Chris Van Hollen of Maryland, Cory Booker of New Jersey, Tim Kaine of Virginia, Amy Klobuchar of Minnesota, Alex Padilla of California, Brian Schatz of Hawaii, Tina Smith of Minnesota and Elizabeth Warren of Massachusetts, as well as independent Senator Bernie Sanders.
