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Advocates Call on President Biden to Fix the Broken Student Loan System Before Restarting Payments

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. 

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.

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