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Biden Administration Executive Actions Resulting in Modifications for the Federal Student Loan Programs. CRS Report R48152, Version 5. Updated

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Title: Biden Administration Executive Actions Resulting in Modifications for the Federal Student Loan Programs. CRS Report R48152, Version 5. Updated
Language: English
Authors: Alexandra Hegji, Sean Stiff, Library of Congress, Congressional Research Service (CRS)
Source: Congressional Research Service. 2024.
Availability: Congressional Research Service. Web site: https://crsreports.congress.gov/
Peer Reviewed: N
Page Count: 31
Publication Date: 2024
Intended Audience: Policymakers
Document Type: Reports - Descriptive
Education Level: Higher Education
Postsecondary Education
Descriptors: Student Loan Programs, Debt (Financial), Educational Finance, Loan Repayment, Federal Aid, Budgets, Costs, COVID-19, Pandemics, Federal Legislation, Educational Legislation, Higher Education, Grants, Eligibility, Government Role, Federal Government
Laws, Policies and Program Identifiers: Federal Direct Student Loan Program, Family Education Loan Program, Higher Education Act Title IV, Perkins Loan Program, Coronavirus Aid Relief and Economic Security Act 2020
Abstract: The Biden Administration has taken numerous actions to address student loan debt. These actions have ranged in scope (both in terms of the borrower populations affected and associated modification costs), their rationales, and the avenues through which they were taken (e.g., formal rulemaking procedures, issuance of guidance). One effect of these actions is they have resulted in changes in the costs of outstanding federal student loans, measured in terms of the value in today's dollars of a direct loan or loan guarantee's future cash flows. Opponents of these actions emphasize the extent of cost increases, while supporters contend that these actions help address borrower difficulty in managing and repaying student loan debt. The Department of Education's (ED's) Office of Federal Student Aid (FSA) annually reviews outstanding federal student loans to ensure that, as required by the Federal Credit Reform Act of 1990 (FCRA), enough budget authority is obligated to cover cost increases resulting from action that fits the category of a modification. A modification is government action--whether resulting from new legislation or an exercise of existing agency discretion--that changes direct loans' or loan guarantees' costs. FSA reports modifications and their costs in its annual reports. Annual reports published for FY2021-FY2024 identify numerous modifications (including one that resulted from a change in statute) for which FSA calculated a change in the costs of outstanding student loans. Most of these resulted in modification costs. The remainder resulted in downward modification costs. ED recognized downward modification costs after the Supreme Court ruled in June 2023 that the COVID-19-related, broad-based student loan debt relief policy exceeded the Secretary of Education's statutory authority. ED also reported downward modification costs due to transitioning student loan debt collection services from private collection agencies to Business Process Operations vendors. ED estimated that modification costs in the federal student loan programs totaled about $77 billion in FY2021 and $450 billion in FY2022. In FY2023, ED recognized a total $207 billion downward modification cost. During FY2021-FY2024, ED's single largest modification cost resulted from the announcement of the COVID-19-related, broad-based debt relief policy, totaling $353 billion. In the same period, the single largest downward modification cost, a $333 billion savings, resulted from the Supreme Court's vacatur of that broad-based debt relief policy.
Abstractor: ERIC
Entry Date: 2025
Accession Number: ED671211
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  Data: Biden Administration Executive Actions Resulting in Modifications for the Federal Student Loan Programs. CRS Report R48152, Version 5. Updated
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  Data: Congressional Research Service. Web site: https://crsreports.congress.gov/
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  Data: <searchLink fieldCode="DE" term="%22Student+Loan+Programs%22">Student Loan Programs</searchLink><br /><searchLink fieldCode="DE" term="%22Debt+%28Financial%29%22">Debt (Financial)</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Finance%22">Educational Finance</searchLink><br /><searchLink fieldCode="DE" term="%22Loan+Repayment%22">Loan Repayment</searchLink><br /><searchLink fieldCode="DE" term="%22Federal+Aid%22">Federal Aid</searchLink><br /><searchLink fieldCode="DE" term="%22Budgets%22">Budgets</searchLink><br /><searchLink fieldCode="DE" term="%22Costs%22">Costs</searchLink><br /><searchLink fieldCode="DE" term="%22COVID-19%22">COVID-19</searchLink><br /><searchLink fieldCode="DE" term="%22Pandemics%22">Pandemics</searchLink><br /><searchLink fieldCode="DE" term="%22Federal+Legislation%22">Federal Legislation</searchLink><br /><searchLink fieldCode="DE" term="%22Educational+Legislation%22">Educational Legislation</searchLink><br /><searchLink fieldCode="DE" term="%22Higher+Education%22">Higher Education</searchLink><br /><searchLink fieldCode="DE" term="%22Grants%22">Grants</searchLink><br /><searchLink fieldCode="DE" term="%22Eligibility%22">Eligibility</searchLink><br /><searchLink fieldCode="DE" term="%22Government+Role%22">Government Role</searchLink><br /><searchLink fieldCode="DE" term="%22Federal+Government%22">Federal Government</searchLink>
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  Data: <searchLink fieldCode="SU" term="%22Federal+Direct+Student+Loan+Program%22">Federal Direct Student Loan Program</searchLink><br /><searchLink fieldCode="SU" term="%22Family+Education+Loan+Program%22">Family Education Loan Program</searchLink><br /><searchLink fieldCode="SU" term="%22Higher+Education+Act+Title+IV%22">Higher Education Act Title IV</searchLink><br /><searchLink fieldCode="SU" term="%22Perkins+Loan+Program%22">Perkins Loan Program</searchLink><br /><searchLink fieldCode="SU" term="%22Coronavirus+Aid+Relief+and+Economic+Security+Act+2020%22">Coronavirus Aid Relief and Economic Security Act 2020</searchLink>
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  Data: The Biden Administration has taken numerous actions to address student loan debt. These actions have ranged in scope (both in terms of the borrower populations affected and associated modification costs), their rationales, and the avenues through which they were taken (e.g., formal rulemaking procedures, issuance of guidance). One effect of these actions is they have resulted in changes in the costs of outstanding federal student loans, measured in terms of the value in today's dollars of a direct loan or loan guarantee's future cash flows. Opponents of these actions emphasize the extent of cost increases, while supporters contend that these actions help address borrower difficulty in managing and repaying student loan debt. The Department of Education's (ED's) Office of Federal Student Aid (FSA) annually reviews outstanding federal student loans to ensure that, as required by the Federal Credit Reform Act of 1990 (FCRA), enough budget authority is obligated to cover cost increases resulting from action that fits the category of a modification. A modification is government action--whether resulting from new legislation or an exercise of existing agency discretion--that changes direct loans' or loan guarantees' costs. FSA reports modifications and their costs in its annual reports. Annual reports published for FY2021-FY2024 identify numerous modifications (including one that resulted from a change in statute) for which FSA calculated a change in the costs of outstanding student loans. Most of these resulted in modification costs. The remainder resulted in downward modification costs. ED recognized downward modification costs after the Supreme Court ruled in June 2023 that the COVID-19-related, broad-based student loan debt relief policy exceeded the Secretary of Education's statutory authority. ED also reported downward modification costs due to transitioning student loan debt collection services from private collection agencies to Business Process Operations vendors. ED estimated that modification costs in the federal student loan programs totaled about $77 billion in FY2021 and $450 billion in FY2022. In FY2023, ED recognized a total $207 billion downward modification cost. During FY2021-FY2024, ED's single largest modification cost resulted from the announcement of the COVID-19-related, broad-based debt relief policy, totaling $353 billion. In the same period, the single largest downward modification cost, a $333 billion savings, resulted from the Supreme Court's vacatur of that broad-based debt relief policy.
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      – Text: English
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        PageCount: 31
    Subjects:
      – SubjectFull: Student Loan Programs
        Type: general
      – SubjectFull: Debt (Financial)
        Type: general
      – SubjectFull: Educational Finance
        Type: general
      – SubjectFull: Loan Repayment
        Type: general
      – SubjectFull: Federal Aid
        Type: general
      – SubjectFull: Budgets
        Type: general
      – SubjectFull: Costs
        Type: general
      – SubjectFull: COVID-19
        Type: general
      – SubjectFull: Pandemics
        Type: general
      – SubjectFull: Federal Legislation
        Type: general
      – SubjectFull: Educational Legislation
        Type: general
      – SubjectFull: Higher Education
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      – SubjectFull: Grants
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      – SubjectFull: Eligibility
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      – SubjectFull: Government Role
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      – SubjectFull: Federal Government
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      – SubjectFull: Federal Direct Student Loan Program
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      – SubjectFull: Family Education Loan Program
        Type: general
      – SubjectFull: Higher Education Act Title IV
        Type: general
      – SubjectFull: Perkins Loan Program
        Type: general
      – SubjectFull: Coronavirus Aid Relief and Economic Security Act 2020
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      – TitleFull: Biden Administration Executive Actions Resulting in Modifications for the Federal Student Loan Programs. CRS Report R48152, Version 5. Updated
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