July, 28 2020 | Washington, DC — Today, the Student Borrower Protection Center joined 55 other organizations in submitting a letter to Senate leadership in opposition to the Safely Back to School and Back to Work Act released yesterday.
The SBPC led this effort with Americans for Financial Reform, the Center for Responsible Lending, the National Consumer Law Center (on behalf of its low-income clients), and Young Invincibles.
In the letter, organizations signing the letter contend, “Although simplifying the FAFSA and establishing clear repayment options are worthy goals, this legislation would actually penalize many borrowers and remove important protections, while ignoring the urgent needs for both student loan debt cancellation and, at the very least, extension and expansion of the automatic forbearance period put in place by the CARES Act.”
Mike Pierce, Policy Director at the Student Borrower Protection Center issued the following statement:
“Nearly forty million student loan borrowers are hurtling towards a financial cliff as Senate Republicans look to force borrowers to resume loan payments at the worst possible time. Instead of taking the necessary steps to protect borrowers from a looming financial disaster, we see tired policies that fail to address the magnitude of this crisis.”
Young people have been behind financially since the Great Recession. It’s alarming some members of Congress would again shortchange student borrowers in the midst of financial turmoil. Today, we’re proud to stand with other leading advocates in demanding real measures to protect student borrowers in the short term and put young people on more solid financial footing for long-term recovery.”
The letter urges Congress to pass legislation that:
- Extends the repayment pause for at least one year;
- Expands eligibility for this repayment suspension to include 2020 graduates and the 9 million borrowers left out by the CARES Act; and
- Includes more meaningful relief for borrowers during the pandemic through student debt cancellation.
Statements from other lead authors:
“Instead of providing the student debt cancellation that would reduce expenses for struggling borrowers and boost the economy overall, Senator Alexander and Majority Leader McConnell have given borrowers nothing but rhetoric. You can’t pay your bills with rhetoric,” said Alexis Goldstein, Senior Policy Analyst at Americans for Financial Reform. “Borrowers faced with seeing their student loan payments resume on October 1 in the midst of an explosion of the pandemic and an ever-worsening economy need real solutions, not a worse version of repayment plans they already have.”
“The HEALS Act does nothing to protect struggling student borrowers who will resume payments on their loans come October 1. The bill proposes returning to regular repayment structures that may require vulnerable borrowers to pay more and provides no protections for defaulted borrowers. At a time when African Americans and other students of color are disproportionately affected by the devastating effects of the COVID-19 pandemic, tinkering at the margins of this crisis is not enough. We must extend the payment suspension and provide broad universal student debt cancellation. Real relief is measured by actions, not empty promises. This bill most certainly comes up short,” said Center for Responsible Lending (CRL) Federal Advocacy Director and Senior Counsel Ashley Harrington.
“This proposal provides no new relief for student loan borrowers. It merely repackages the programs that currently exist and leaves borrowers with a less generous, more onerous, and ultimately more expensive repayment plan. It further subjects distressed borrowers to harsh government collection tactics starting on October 1.” said Persis Yu, Director of the National Consumer Law Center’s Student Loan Borrower Assistance Project.
“This proposed legislation falls far short of what young Americans need and should expect from their leaders,” said Kyle Southern, Policy and Advocacy Director for Higher Education and Workforce at Young Invincibles. “Rather than extend vital support during a dual public health and economic crisis, this bill would leave millions of student loan borrowers without protections while failing to extend and expand a repayment suspension put in place by the CARES Act. Doing so would only make the burden of student debt heavier, leaving many young Americans financially insecure.”