U.S. Sens. Elizabeth Warren (D-MA), Tina Smith (D-MN), Sherrod Brown (D-OH), and Edward J. Markey (D-MA) forwarded correspondence Thursday to Secretary of Education Miguel Cardona requesting information regarding efforts to transition federal student loan borrowers back into repayment model.
The senators inquired about the Department of Education (ED) and the Office of Federal Student Aid (FSA) plans ahead of the scheduled end for paused student loan payments and interest in September.
“We support cancelling $50,000 of debt for each borrower to relieve this burden on our economy,” the lawmakers wrote, “but until that decision is made, we are requesting information on how the Department of Education and Office of Federal Student Aid are preparing for this transition and holding loan servicers accountable to inform and support borrowers.”
The senators noted the Coronavirus Aid, Relief, and Economic Security (CARES) Act passage paused payments for millions of borrowers, with both former President Donald Trump and President Joe Biden having extended the pause throughout the pandemic. Biden extended the pause to Sept. 30, 2021, for the 87 percent of borrowers with direct federal loans.
“If struggling borrowers are dropped back into repayment on their student loans with no adjustments or support – and at a time that their financial circumstances are likely to become worse as their unemployment benefits run out – they could find themselves in default or distress, facing a vulnerable situation and disastrous long-term economic consequences,” the lawmakers wrote.
The lawmakers noted via the American Rescue Plan Congress appropriated $91 million to FSA for outreach to borrowers, indicating as loan payments restart, borrowers will need individualized support to assess their current circumstances, identify the repayment plan to best meet their needs and help navigate enrollment or re-enrollment.