Improve the Repayment Process
Simplify Repayment and Forgiveness Programs
Borrower advocacy is an important concept among EFC member organizations. Through their work counseling borrowers throughout all stages of the education financing process — from when they first begin researching loan options until they successfully make their last payment — EFC members know first-hand that the current repayment process and forgiveness options are far too complex for even the most well-informed borrower.
To improve outcomes and the borrower experience, Congress should reduce repayment options to two plans (standard and income-based) and combine existing forgiveness programs into a single program.
Improve Income-Driven Repayment
In order to safeguard borrowers from negative amortization, EFC recommends that Congress require IDR programs to, at minimum, cover the interest accruing on a loan balance.
EFC also recommends that Department of Education and the Treasury Department allow student loan borrowers to give ED advance permission to automatically access their tax information for the limited purpose of determining eligibility and/or monthly payment amounts for all IDR plans — often referred to as “multi-year consent” — rather than requiring borrowers to proactively submit updated income information every year. EFC urges ED and Treasury to quickly implement multi-year consent per their January 2017 Memorandum of Understanding.