Some student-loan borrowers could get extra money from their school under a new Education Department proposal

Business Insider

Ayelet Sheffey

January 23, 2024

• The Education Department is crafting new regulations to ensure better cash management for students.

• It proposed requiring schools to return unused meal plan funds to students who received federal aid.

• It also wants students to have more flexibility to purchase course materials from outside sources.

President Joe Biden’s Education Department has kicked off another round of negotiations to craft new rules for higher education — and it could get some student-loan borrowers extra cash.

In early January the department held its first of three negotiation sessions on a series of higher education regulations it’s hoping to implement next summer, at the earliest. They’re primarily focused on “cash management,” per the proposed text, which outlines how schools manage federal funds.

One of the department’s proposals concerns how schools manage students’ meal plans. Specifically, if a student receives federal student aid — like federal loans or grants — and uses that aid to pay for meal plans, the department wants to require schools to return the unused funds to those students “no later than 14 days after the end of the payment period,” according to the proposal.

Previously, schools were allowed to keep the leftover funds despite students paying the full cost of the meal plan.

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