Letter to Congress in Support of Broad-Based Student Loan Debt Cancellation
| The Honorable Nancy Pelosi Speaker of the House U.S. House of Representatives H-232, The Capitol Washington, DC 20515 |
The Honorable Kevin McCarthy Minority Leader U.S. House of Representatives H-204, The Capitol Washington, DC 20515 |
| The Honorable Mitch McConnell Majority Leader U.S. Senate S-220, U.S. Capitol Washington, D.C. 20510 |
The Honorable Chuck Schumer Minority Leader U.S. Senate 322 Hart Senate Office Building Washington, DC 20510 |
September 25, 2020
Dear Speaker Pelosi, Minority Leader McCarthy, Majority Leader McConnell, and Minority Leader Schumer:
We write on behalf of a coalition of 30 Higher Ed, Not Debt campaign members and allies, including youth organizations, civil rights groups, labor unions, think tanks, advocacy nonprofits, and consumer and student borrower organizations in support of broad-based student loan debt cancellation.
Congress will play a critical role in the economic stability of public higher education, college students, and student loan borrowers in relief legislation. Urgency continues to mount for your constituents. To avoid the same consequences of the Great Recession, Congress not only needs to substantially increase funding for public higher education, but it must also broadly cancel student loan debt. Solutions for current borrowers must go hand-in-hand with fixes for future students.
There are 43 million Americans who have student debt, and they hold a total of $1.6 trillion in student loans. The average student loan debt of a recent bachelor’s degree graduate who borrowed is $30,000. Existing disparities between racial and socioeconomic groups of student loan borrowers have only been further laid bare, then exacerbated by the coronavirus recession. Black and Latinx families, low-income individuals, and first-generation,[1] and undocumented[2] borrowers in particular are disproportionately harmed by student debt.
The current suspension of payments on federally-held student loans and halt on involuntary collections ends on December 31, 2020. This creates a cliff where borrowers will need to begin repaying their loans on New Year’s Day 2021. If the cliff isn’t resolved, low-income borrowers in default are at risk of having their tax refunds seized in 2021; many file their taxes in late January in order to obtain needed funds. Those who graduate in the fall will have a particularly hard time, as they will enter repayment in the worst job market since 2008. Making borrowers go back into repayment right around the holidays is an implementation and financial disaster in the making.
As one step, Congress must expand Coronavirus Aid, Relief, and Economic Security (CARES) Act provisions on pausing student loan payments and collections, 0 percent interest rates, and qualifying payments toward forgiveness programs. The current payment and collections suspension, issued through Executive Order, also only applies to Department of Education-held loans, leaving out 8 million borrowers. We need legislation to apply this relief to more borrowers and for a longer time period. Any solution to this crisis must include all student loan borrowers, including the 8 million Perkins and Federal Family Education Loan (FFEL) borrowers excluded from CARES relief and all private student loan borrowers.
But this is not enough. Congress needs to take long-term and immediate meaningful action for student loan borrowers. Given the emergency, we need solutions that are simple to implement and get help to recipients right away. Broad student debt cancellation achieves this. Cancelling even a small portion of debt would provide benefits to all borrowers. It would especially help borrowers in default, who are struggling to make ends meet and are disproportionately Black.[3] It would also have a significant stimulating effect on our economy.
We urge the Senate to prioritize broad-based student loan debt cancellation and serious assistance for student loan borrowers in the next stimulus package.
Sincerely,
ABISA
Alianza Nacional de Campesinas
American Association of University Women (AAUW)
American Federation of Teachers
Americans for Financial Reform
Association of Latino Administrators and Superintendents
Association of Young Americans (AYA)
BiNet USA
Center for American Progress
Center for Law and Social Policy (CLASP)
Demos
East Bay Community Law Center
EDGE Consulting Partners
Equality North Carolina
Generation Progress
Hildreth Institute
Maryland Consumer Rights Coalition (MCRC)
National Center for Lesbian Rights
National Consumer Law Center, on behalf of their low-income clients
National Education Association
National Equality Action Team (NEAT)
National Network for Immigrant and Refugee Rights
National Urban League
National Young Famers Coalition
NextGen California
PHENOM (Public Higher Education Network of Massachusetts)
Public Citizen
Student Borrower Protection Center
Student Debt Crisis
The Education Trust
Young Invincibles
[1] https://www.americanprogress.org/issues/education-postsecondary/news/2018/10/16/459394/forgotten-faces-student-loan-default
[2] https://genprogress.org/report-removing-barriers-to-higher-education-for-undocumented-students/
[3] https://www.americanprogress.org/issues/education-postsecondary/reports/2019/12/02/477929/continued-student-loan-crisis-black-borrowers
