SBPC and the American Federation of Teachers Urge Government and Industry Action to Protect Student Loan Borrowers in the Face of the Coronavirus Pandemic
March 19, 2020 | WASHINGTON, DC — As Americans face the economic fallout from the coronavirus, the American Federation of Teachers (AFT) and the Student Borrower Protection Center (SBPC) today sent letters to government and industry leaders across the student loan system demanding action to protect student loan borrowers during this nationwide crisis. The organizations sent letters to Education Secretary Betsy DeVos, Consumer Financial Protection Bureau Director Kathy Kraninger, and nine large student loan companies that service loans owed by tens of millions of Americans with student debt.
The public health and economic effects of the coronavirus crisis are projected to be widespread, upending daily life for millions of Americans and likely driving the U.S. into its first recession in over a decade. These disruptions will pose unique challenges for student loan borrowers and will acutely stress a student loan repayment system that is already badly broken. Private sector companies, the Department of Education, and the Consumer Financial Protection Bureau each play a central role in the system. Absent the steps outlined in these letters, student loan borrowers will be forced to bear the brunt of this turmoil.
In the letters sent today, the AFT and the SBPC are offering a roadmap for government and industry stakeholders across the student loan system to take immediate steps to assist struggling student loan borrowers without waiting for Congress to act. The organizations are calling for the elimination of red tape for borrowers in distress who desperately need access to critical protections, as well as for these stakeholders to ensure that borrowers’ rights are protected. The letters signed by AFT President Randi Weingarten and SBPC Executive Director Seth Frotman can be found here:
- Letter to the Secretary Betsy Devos, U.S. Department of Education. The AFT and the SBPC call on Secretary DeVos to use the extraordinary authority granted to the Secretary of Education under the 2003 HEROES Act to waive a wide range of paperwork and administrative requirements that create unnecessary barriers to payment relief and loan forgiveness for Americans with student debt.
- Letter to the Director Kathy Kraninger, Consumer Financial Protection Bureau. The AFT and the SBPC call on CFPB Director Kathy Kraninger to restore the agency’s historic role as the independent regulator of the student loan market, including the large private-sector financial services firms that handle student loans owned by the U.S. Department of Education. For more than two years, the CFPB has failed to oversee these firms as a direct result of obstruction by the Department of Education.
- Letters to Student Loan Industry CEOs. The AFT and the SBPC call on the nine large servicing company contractors for the Education Department to increase resources dedicated to helping borrowers access federal protections, including income-driven repayment and certain military benefits under the Servicemembers Civil Relief Act. The nine companies are tasked with managing the federal student loan program for more than 40 million borrowers and include: Navient, FedLoan Servicing (Pennsylvania Higher Education Assistance Agency), CornerStone, EdFinancial Services, Granite State, Heartland/ECSI, MOHELA, Nelnet, and OSLA Servicing.