Shaheen, Senators Call for Long-term Relief for 43 Million Student Loan Borrowers Amid COVID-19
Administration’s executive order to extend student loan relief still leaves millions of Americans behind
(Washington, DC) – Yesterday, U.S. Senator Jeanne Shaheen (D-NH) joined U.S. Senator Mark Warner (D-VA) and a group of 15 Senators in a letter to Senate leaders urging them to include long-term relief for millions of Americans with student loans in the next coronavirus relief package as negotiations between Senate Republicans and Democrats continue. The letter comes after the President issued an executive order that only places a three-month forbearance for some student loan borrowers, leaving nearly 8 million student loan borrowers to fend for themselves in the midst of an economic crisis caused by the COVID-19 pandemic.
“Although the President recently issued an Executive Order temporarily extending forbearance for some borrowers and waiving interest through the end of the year, Congress must act to ensure this relief is reliably available until the public health emergency ends. Further, only congressional action will ensure that all of our nation’s 43 million federal student loan borrowers are able to access full relief. Just as the Coronavirus Aid, Relief, and Economic Security (CARES) Act provided six months of relief following administrative action, we strongly believe that student loan forbearance should be codified for the duration of our economic crisis in the next COVID-19 response legislation,” the Senators wrote in a letter to Majority Leader Mitch McConnell and Minority Leader Chuck Schumer.
Due to the financial impact of COVID-19, many student loan borrowers faced the uncertainty of meeting their monthly repayment obligations in addition to paying for their basic necessities. To help provide a financial lifeline, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act which provided six months of interest free relief for certain federal student loan borrowers, through September 30, 2020. With Senate Republicans and Democrats still negotiating a deal on the next COVID-relief package, the President signed an executive order to extend existing CARES Act student loan repayment protections for another three months, which still leaves nearly 8 million Americans from being unable to attain this critical relief.
“Unfortunately, nearly 8 million borrowers were not eligible for the CARES Act relief, and will not benefit from the President’s Executive Order. These donut holes must be closed. And, while administrative action extending the forbearance will provide relief to many borrowers, it is not clear how the U.S. Department of Education will handle crucial issues related to credit toward forgiveness, credit reporting, loan rehabilitation, and collections that were addressed by the CARES Act. It is critical that Congress provide this relief legislatively so that payments do not resume before the economy is showing signs of recovery, that borrowers do not experience collateral damage from further donut holes in the Executive Order, and that no one faces unnecessary uncertainty about the status and treatment of their loans during this difficult time,” wrote the Senators.
In the letter, the Senators underscore that student loan debt has had a disproportionate impact on Black and Latino Americans. Approximately 90 percent of Black students and 72 percent of Latino students take out loans, compared to 66 percent of their white counterparts. While the student loan crisis has always contributed to inequality in the U.S., the COVID-19 crisis has only exposed and exacerbated these inequities.
To help make sure that all student loan borrowers have access to financial relief, the Senators also urged that the next COVID relief package include long-term financial relief for all federal student loan borrowers through September 2021, which mirrors provisions from the House passed HEROES Act.
A copy of the letter is found here.
Senator Shaheen has led efforts in Congress to help students manage their debt and to make college more affordable, championing legislation to increase access to higher education for Granite Staters. Last month, Shaheen introduced the Bank on Students Coronavirus Emergency Loan Refinancing Act with Senator Elizabeth Warren (D-MA), which would allow student loan borrowers to refinance their student loan debt down to the historically low federal Stafford Student Loan rates, which recently went into effect. Their bill is based on legislation introduced last year with a group of lawmakers to allow undergraduate borrowers repaying public or private loans to refinance those loans at lower interest rates, reducing monthly payments and helping borrowers repay loans sooner. In March, Shaheen sent a letter to Congressional negotiators with Senator Warren, as well as Senators Sherrod Brown (D-OH) and Dick Durbin (D-IL), urging negotiators to cancel student loan payments for the duration of the emergency and calling for $10,000 in debt forgiveness.