Statement from Seth Frotman, SBPC Executive Director and former CFPB Student Loan Ombudsman, on Senate Resolution Calling for Administrative Action to Cancel Student Debt to Stimulate the Economy
The President Has Sweeping Authority Under Current Law to Provide Immediate Debt Relief to All Borrowers with Federal Student Loans
September 17, 2020 | WASHINGTON, DC — Student Borrower Protection Center Executive Director and former CFPB Student Loan Ombudsman Seth Frotman released the following statement on a senate resolution offered today by Senate Democrats, led by Senate Minority Leader Chuck Schumer and Senator Elizabeth Warren, calling on the President to use existing authority under the Higher Education Act to provide broad-based debt cancellation to tens of millions of student loan borrowers, ending the student debt crisis, stimulating the economy, and closing the racial wealth gap:
“As the COVID pandemic and the resulting economic fallout continue to spiral out of control, tens of millions of student loan borrowers need the President to cancel student debt — a power granted by Congress under existing law. Senate Democrats, led by Senators Schumer and Warren have long recognized the threat student debt poses to millions of families and to our economy. Student debt dampens economic growth, drives the racial wealth gap, pushes homeownership beyond reach, and jeopardizes retirement security. Borrowers need real, long-term relief from the crushing burden of student debt and they need it now.”
Earlier this year, the SBPC released a new study showing that student loan borrowers with high debt burdens pay tens of thousands of dollars in hidden costs on other financial products, including mortgages and auto loans, as a result of their student debt. According to the SBPC, a typical borrower with a high student debt burden can pay as much as $30,000 in these hidden costs over a lifetime.
The full text of the Senate Resolution is available here.
The Student Borrower Protection Center is a nonprofit organization focused on alleviating the burden of student debt for millions of Americans. SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students.