Federal Preemption and Joint Federal-State Regulation and Oversight of the Department of Education's Federal Student Loan Programs and Federal Student Loan Servicers

The U.S. Department of Education (Department) issues this final interpretation, which revises and supersedes its interpretation published on August 12, 2021 (the 2021 interpretation). This interpretation revises and clarifies the Department's position on the legality of State laws and regulations that govern various aspects of the servicing of Federal student loans, such as preventing unfair or deceptive practices, correcting misapplied payments, or addressing refusals to communicate with borrowers. The Department concludes that these State laws are preempted by the Higher Education Act of 1965, as amended (HEA) and other applicable Federal laws only in limited and discrete respects, as further discussed in this interpretation. This interpretation will help facilitate close coordination between the Department and its State partners to further enhance both servicer accountability and borrower protections.