New York City Expands Student Loan Relief Program Amid Federal Overhaul

On August 7, 2025, Mayor Eric Adams announced that a citywide student-loan assistance program—previously limited to civil servants—will now be available to all eligible New Yorkers. Administered in partnership with the financial-technology company Summer, the initiative provides personalized guidance to help borrowers navigate complex repayment choices.

The expansion comes during a time of sweeping federal changes that are reshaping the student-loan repayment system. Millions of borrowers nationwide are losing access to popular repayment plans and facing higher long-term costs. For New York City’s 1.4 million student-loan borrowers, the local program offers a modest but timely safety net.

In July 2025, Congress passed the “One Big, Beautiful Bill,” restructuring the student-loan system and eliminating most existing income-driven repayment plans, including SAVE, PAYE, and ICR. By July 1, 2028, borrowers will be left with only an expanded Income-Based Repayment plan or the new Repayment Assistance Plan. Interest resumed for SAVE borrowers on August 1, 2025, adding an average of $3,500 per year in costs. The Repayment Assistance Plan will calculate payments between 1 and 10 percent of adjusted gross income, require a minimum payment of $10 per month, and extend loan forgiveness to thirty years. Consolidated Parent PLUS loans will now be eligible for Income-Based Repayment, giving families more flexibility. Analysts warn that these changes could push many borrowers toward private lenders, where interest rates may be higher and borrower protections more limited.

For New York City borrowers, the expanded local program offers critical help when federal protections are being reduced. Borrowers can receive one-on-one counseling and repayment optimization through Summer at no cost. With the Repayment Assistance Plan launching in July 2026 and older plans disappearing by 2028, New Yorkers face an urgent need to evaluate their repayment strategies. The changes are especially important for public service workers in the city, many of whom rely on the Public Service Loan Forgiveness program and could see shifts in their eligibility or timelines.

Federal loan policy is moving toward fewer and longer repayment options, with the possibility of higher total costs. New York City’s program offers an important safeguard, but it will only help those who know about it and take advantage of its services. For HEI professionals and student-support staff, ensuring that borrowers understand their changing options is now a pressing responsibility.

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Sources
BK Reader – NYC Launches Student Loan Reduction Program for All New Yorkers
Times of India – Trump’s Student Loan Reset
The Sun – Big, Beautiful Bill and Student Loan Payments
Business Insider – Private Lending Expected to Expand Under New Rules
NerdWallet – Understanding the Repayment Assistance Plan (RAP)

Tracking the Elusive Truth: The Higher Education Inquirer Seeks Decades of Bankruptcy Loan Forgiveness Data

In a modest but potentially revealing inquiry, the Higher Education Inquirer has submitted a Freedom of Information Act (FOIA) request to the U.S. Department of Education asking for a count of the number of student loans discharged in bankruptcy from 1965 to 2024. The request, dated June 10, 2025, was acknowledged the same day by the Department’s FOIA Service Center under FOIA Request No. 25-03954-F.

“The Higher Education Inquirer is requesting a count of the number of student loans forgiven in bankruptcy per year from 1965 to 2024.”

It’s a simple request with profound implications. While the nation debates student loan forgiveness through executive action and legislative reforms, the forgotten path of bankruptcy discharge—once a legally viable option for debt relief—has been quietly buried over the past several decades.

A Timeline of Restriction: The Death of Bankruptcy Relief

When the Higher Education Act of 1965 established federal student loans, they were treated like other forms of consumer debt. Borrowers could, in principle, discharge them through bankruptcy just like credit card debt or medical bills.

But that began to change in the late 1970s, as concerns over potential abuse of the system gained traction in Congress. In 1976, a new law prohibited the discharge of federal student loans in bankruptcy within the first five years of repayment unless the borrower could prove “undue hardship”—a vague standard that was rarely met.

From there, the restrictions only grew tighter:

• 1990: The waiting period for dischargeability was extended to seven years.

• 1998: The option to discharge federal student loans in bankruptcy for any reason other than “undue hardship” was eliminated entirely. This meant student loan borrowers had to meet the strict and often inaccessible hardship standard at all times.

• 2005: Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), Congress extended the “undue hardship” requirement to most private student loans as well—effectively removing nearly all forms of bankruptcy relief from the table for student debtors.

These changes did not result from clear evidence of widespread abuse. Rather, they were fueled by myths of “deadbeat graduates” walking away from their obligations and by lobbying from banks, guaranty agencies, and debt collection firms that profited from non-dischargeable debt. Meanwhile, evidence of hardship among borrowers grew, especially for those who attended predatory for-profit colleges or dropped out without a degree.

The Brunner Barrier

The biggest obstacle for borrowers remains the so-called “Brunner test,” a three-prong legal standard established in a 1987 court case, Brunner v. New York State Higher Education Services Corp. It requires borrowers to prove:

1. They cannot maintain a minimal standard of living if forced to repay the loans,

2. Their financial situation is unlikely to improve, and

3. They made a good-faith effort to repay the loans.

Many judges interpreted these criteria narrowly, creating a virtually insurmountable hurdle. Borrowers with severe disabilities, advanced age, or long-term unemployment have been denied relief even when destitute.

What We Still Don’t Know

Despite these legal developments and the hardship they created, data on how many people have succeeded in discharging their student loans through bankruptcy remains remarkably scarce. Advocacy groups and journalists have long questioned why no federal agency tracks this information in a clear, public-facing format.

That’s what prompted the Higher Education Inquirer’s FOIA request—an effort to establish a factual baseline. We asked the Department of Education for an annual count of bankruptcy discharges involving student loans over a 60-year period, from 1965 to 2024.

The Bureaucratic Wall

According to the Department’s FOIA Service Center, the average processing time for such requests is currently 185 business days—about nine months. While the Department did not ask for clarification immediately, it reserves the right to do so within ten business days. Failure to respond to such a request would result in administrative closure of the FOIA—yet another form of delay that keeps the public in the dark.

This bureaucratic stonewalling is part of a larger pattern. While the Department of Education has been quick to announce student loan forgiveness programs under executive orders or settlement agreements, it remains reluctant to shine a light on longstanding failures—especially the erosion of legal remedies like bankruptcy.

A Step Toward Truth and Accountability

The public deserves a clear view of the history and consequences of stripping bankruptcy protections from student borrowers. It’s not just a legal matter—it’s a story of systemic neglect, political pressure, and financial exploitation. Without access to historical data, reform remains a guesswork operation and accountability remains elusive.

We at the Higher Education Inquirer will continue to press for answers. If and when the FOIA request is fulfilled, we will publish the data and conduct a thorough analysis, year by year. We believe that exposing the truth about student loan bankruptcy isn’t just a matter of curiosity—it’s a step toward justice.

If you have experience with student loan bankruptcy, data that could assist our investigation, or simply want to share your story, contact us at gmcghee@aya.yale.edu.