The regulations propose to alleviate debt burdens for borrowers whose schools closed, borrowers who are totally and permanently disabled, and for public service workers who have met their commitments under the Public Service Loan Forgiveness (PSLF) program. It would eliminate what U.S. Department of Education officials say are overly strict limits on when borrowers can file a claim, and expand the type of misconduct that can lead to an approved claim to include aggressive and deceptive recruitment practices.
The regulations would also stop many instances of interest capitalization, which officials say occurs when unpaid interest is added to a borrower’s principal balance, increasing the total amount they owe. The plan proposes allowing more payments to qualify for PSLF, including partial, lump sum, and late payments. It would also allow some kinds of deferments and forbearances to count toward PSLF, such as those for Peace Corps and AmeriCorps service, National Guard duty, and military service.