The American Federation of Teachers and the National Education Association — the nation’s two largest teacher unions — combined the Student Borrower Protection Center, Americans for Financial Reform, also above 50 other institutions to oppose the Senate GOP’s recent stimulation proposal.
Congress formerly had suspended all obligations, attention, and sets on government-held national pupil loans beneath the CARES Act, which was commissioned in April. However, these protections are scheduled to expire on September 30, 2020. Consequently, countless pupil loan debtors will likely probably be confronting pupil loan invoices and sets, even since the pandemic and higher unemployment rates persist.
This week, Senate GOP leaders introduced the Safely Back to School and Back to Work Act as an alternative to this looming student debt crisis. The bill will simplify the national pupil loan repayment program, and would incorporate an income-driven repayment alternative that would permit pupil loan debtors earning no income to possess no monthly repayment responsibility. “When you do begin earning income, your monthly payment will never be more than 10% of your income,” stated Senator Lamar Alexander (R-Tenn), the lead sponsor, in a declaration.
However, this proposition is virtually equal to the Revised Pay As You Earn (REPAYE) repayment program, which exempts debtors earning less than 150% of the poverty limit by any repayment responsibility, also caps other debtors’ pupil loan obligations at 10% of the discretionary income. The Senate GOP bill doesn’t include an expansion of their CARES Act’s pupil loan forbearance provisions, or some other relief like pupil loan forgiveness.
“The provisions from the Chairman’s proposal mirror many solutions for borrowers that already exist,” 56 organizations composed in their letter to Senate leaders. “Given that the current health and economic crisis has no end in sight, Congress should provide real relief for student borrowers… Instead of allowing already limited relief to lapse, Congress should pass legislation that extends the repayment pause for at least one year, expands eligibility for this repayment suspension to include 2020 graduates and the 9 million borrowers left out by the CARES Act, and includes more meaningful relief for borrowers during the pandemic through student debt cancellation.”
The associations noted that gender and racial disparities persist in higher education and student debt. “Black graduates borrow at higher rates because of a history of racially exclusionary policies that have resulted in persistent racial inequities in incomes and wealth. On average, Black borrowers owe $7,400 more on student loans than their white counterparts. Black Americans and Latino Americans have also been disproportionately affected by both the public health and negative economic consequences of the Covid-19 pandemic,” the associations composed.
The 56 associations also voiced serious concerns regarding additional facets of the Senate plan, for example, exception of Parent PLUS debtors from some other aid, lost credit from the Public Service loan Forgiveness program, and a resumption of pressured collections for borrowers in default, such as impending offset of Social Security benefits.
Additional associations that signed on to the correspondence contain the Action Center on Race & the Economy, Consumer Reports, the National Urban League, and Public Citizen.
House Democrats handed the HEROES Act at May, which could prolong the CARES Act’s pupil loan payment and curiosity rate for an extra 12 weeks, and could also provide $10,000 in private and federal student loan forgiveness to borrowers experiencing economic distress. Senate GOP leaders refused the HEROES Act without requiring a formal vote for this.
Discussions in Congress continue, and it’s likely that there might be compromise laws between House Democrats and Senate Republicans.
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