Photo Courtesy of U.S. DOE
U.S. Department of Education Secretary Betsy DeVos
By Forum Staff
Senate Democrats recently called on Secretary of Education Betsy DeVos to take steps to ensure federal student loan borrowers who have been left out of the Coronavirus Aid, Relief, and Economic Security (CARES) Act receive federal student loan relief—including a freeze on all payments, interest, and collections.
Since March, the CARES Act has provided forbearance, waived interest, and halted collections for borrowers whose student loans were directly held by the DOE, according to U.S. Sen. Kirsten Gillibrand (D-N.Y.). However, more than 8 million borrowers have been unable to access relief because some or all of their loans are held by commercial or school-based lenders. More than half of those borrowers have not received any relief and continue to be burdened by their student loans in the face of the economic downturn caused by the pandemic, Gillibrand said before noting that the DOE has the ability to provide assistance to some of these borrowers by waiving penalties and restrictions to loan consolidations that will provide necessary relief during the economic crisis.
In a letter, Senate Dems urged DeVos to take immediate action to help federal student loan borrowers qualify for relief. The senators pressed DeVos to immediately reach out to borrowers currently missing out on relief by helping them consolidate their loans held by commercial or school-based lenders that do not qualify for CARES Act relief into qualifying loans. Additionally, they urged the DOE to improve the consolidation process for borrowers by waiving restrictions and penalties during the national emergency.
The DOE “can easily take administrative action to suspend consolidation restrictions and penalties during the national emergency, such as the limitation on consolidating once, the reset of the forgiveness clock, and interest-rate roundup, using the same authority that was utilized to implement the president’s Aug. 8 Executive Order. Under Section 2(a)(1) of the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, the secretary may ‘waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV.’ The department should use this authority to waive all barriers to consolidation,” the elected officials wrote to DeVos. “Additionally, the department should encourage the commercial FFEL entities, institutions holding Perkins Loans, and the secretary of Health and Human Services, which collectively hold the 4.4 million loans completely un-covered by current relief, to initiate a similar outreach campaign to their borrowers. As secretary, you retain significant authority and leadership over these entities, including the ongoing payment of taxpayer subsidies. You should quickly ask loan holders requesting to inform borrowers of their option to consolidate as a means to expediently receive the relief afforded by the CARES Act.”
Last week, Gillibrand said, “Without this relief, students and graduates across the country will continue facing additional and unnecessary financial strain during the economic crisis. Secretary DeVos must act immediately to ensure that millions of student loan borrowers get the relief they need.”
