Dive Brief:

• A rule-making panel is considering ways to make it easier for students to get out of loan debt they acquired while attending fraudulent colleges while overall repayment trends are good.
• The Chronicle of Higher Education reports the panel’s representatives of for-profit colleges oppose a change that would eliminate a statute of limitations on forgiveness claims, and if the entire panel cannot agree on a solution, the U.S. Department of Education would be free to propose its own rule.
• Also this week, the department released the Quarterly Student Aid Report, which shows income-based repayments continuing to rise, hardship deferments declining along with delinquencies, and $2.2 billion in recovered defaults, thanks mostly to loan rehabilitation, in which borrowers make nine on-time payments in a 10-month period.

Dive Insight:

One of the Obama administration’s most defining achievements in the higher education space has been its overhaul of federal financial aid. Increasing Pell Grant limits has allowed lower-income students to get more money from the government to fund their educations, and an expansion of income-based repayment, in the short term at least, has helped students meet their debt obligations.

There is some concern with income-based repayment that a longer loan life will end up being detrimental to students because they will end up paying more in interest, and therefore more overall, to get out of debt. But the quarterly report allows some room to celebrate as fewer defaults are certainly a promising indicator of the health of the federal financial aid program overall.