Advocates Call on President Biden to Fix the Broken Student Loan System Before Restarting Student Loan Payments, Commemorate the One-Year Anniversary of the CARES Act
There is a broad consensus among borrowers, advocates, industry, regulators, enforcement officials, and lawmakers of both parties that a rush to resume student loan payments is a recipe for disaster
MARCH 27, 2021 | WASHINGTON, D.C.— Today, the nearly three-dozen undersigned organizations released the following statement on the one-year anniversary of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). On March 27, 2020, President Trump signed legislation pausing student loan payments and suspending interest charges for tens of millions of student loan borrowers-- a set of protections extended via executive actions taken in August, December, and January.
One year later, organizations representing millions of students, student loan borrowers, workers, veterans, people with disabilities, people of faith, and consumers called on President Biden to keep his promises to student loan borrowers before restarting student loan payments:
President Biden must make good on his promises to student loan borrowers before they have to pay back another dime.
Before the pandemic struck, tens of millions of borrowers struggled to navigate a badly broken student loan system. America's student debt crisis wreaked havoc on the financial lives of families across the country, despite payment relief and debt forgiveness programs that promised that these debts would never be a life-long burden. The Biden Administration now has a once-in-a-generation chance to repair the damage caused by decades of government mismanagement and industry abuses--an opportunity and an obligation that must be fulfilled before any action is taken to resume monthly student loan payments.Â
There is a broad consensus among borrowers, advocates, industry, regulators, enforcement officials, and lawmakers of both parties that a rush to resume student loan payments is a recipe for disaster, absent significant structural reforms and real, immediate relief, such as debt cancellation, for borrowers trapped in this broken system.
The preceding statement was released by the following organizations:
Student Borrower Protection Center
Alaska PIRG
American Federation of Teachers - Oregon
Americans for Financial Reform
Anti-Poverty Network of New Jersey
Association of Latino Administrators and Superintendents
Association of Young Americans (AYA)
Carolina Jews for Justice
Center for Responsible Lending
Community Service Society of New York
Consumer Federation of California
Debt Collective
Debt-Free MD, Inc.
Housing and Economic Rights Advocates
JFI - Jain Family Institute
Minority Veterans of America
National Consumer Law Center (on behalf of our low-income clients)
National Disability Institute
New Era Colorado
New Jersey Citizen Action
New Yorkers for Responsible Lending
Ohio Student Association
People's Parity Project
Public Citizen
San Francisco Office of Financial Empowerment
SEIU Local 500
Student Debt Crisis
U.S. Public Interest Research Group
United Church of Christ, Justice and Local Church Ministries
Western Center on Law and Poverty
Women Employed
Young Invincibles
Zero Debt Massachusetts
BACKGROUND
On January 21, 2021, President Biden issued an executive action pausing student loan payments, suspending interest charges, and halting debt collection for all student loans owned by the federal government through the end of September 2021. This action continued a pause in student loan payments first initiated by President Trump in March 2020, codified by Congress via the CARES Act, and extended via prior executive actions in August and December 2020. No student loan borrower with a federally-held loan has been required to make a student loan payment since March 2020.
However, the existing payment pause is incomplete. More than 9 million student loan borrowers have been excluded from all federal student loan debt relief programs enacted since the start of the COVID-19 pandemic. Lawmakers from both parties have introduced legislation to address the borrowers left out from the suspension, and advocates have called on the Biden Administration to take immediate executive action to extend protections for these borrowers.
Throughout the history of the federal student loan system, borrowers, including servicemembers, public service workers, defrauded borrowers, people with disabilities, and people with low incomes, have failed to benefit from programs intended to protect them from severe financial hardship. Across the country, millions of these borrowers are forced to shoulder debts that should have been canceled under the law. Advocates, including many of the organizations signing this statement, have called for the Biden Administration to immediately deliver relief for these borrowers as part of a comprehensive effort to reform the student loan system.