Consumer Groups Call for Cancellation of Federal Student Loan Debt as Part of Pandemic Relief

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Yesterday, a group of 66 groups—including community, civil rights, consumer, and student advocacy groups—wrote a letter to the leadership of both the U.S. Senate and the U.S. House of Representatives urging them to cancel all federal student loan debt in the next coronavirus relief legislation.

The groups state:

Without a comprehensive long-term solution, the CARES Act suspension of federal student loans for eighty percent of borrowers merely kicks the problem down the road to this fall, when jobless claims are predicted to exceed Great Depression-era levels, and the financial crisis will have severely deepened

The letter continues:

Cancelling federal student debt would bring impactful relief to 43 million Americans and their families. Loan cancellation would provide the greatest benefit to many struggling low-income 5 borrowers who would likely see their debt extinguished. For those who would still have a 6 balance, suspending payments until the end of the year would prevent them from facing yet another financial shock when the CARES Act federal student loan suspension expires in October.

The letter also acknowledges student loan servicers are “shuttering call centers” or “reducing capacity.” Due to this, student loan cancellation “would ensure there is less need for borrowers to take time out of their days to chase down their servicers and try and secure changes to, or help on, their student loans.”