Statement on the CARES Act
“The Senate just unanimously passed the CARES Act, and the House is expected to follow suit and send it to the President for his signature on Friday. The CARES Act includes urgently needed help for students, student loan borrowers, and colleges and universities, but it is only an important first step. Much more help will be needed in the weeks, months, and years to come.
“The new law provides over $14 billion to help colleges and universities weather both the immediate and long-term effects of the pandemic. While this funding is necessary and welcome, it is just a start. Colleges — and, importantly, their students — will need far more help in the coming months to prevent a repeat of the devastating funding cuts and the resulting rise in tuition and student debt that occurred in the wake of the Great Recession.
“The bill provides relief for almost all federal student loan borrowers by ensuring covered borrowers will not have to worry about falling behind on student loan payments, experience growing balances, or face default and collections during this time of crisis.
“The bill specifically helps federal student loan borrowers by pausing monthly loan payments through September 30 without interest accruing; each of the months of paused payments counts toward forgiveness under Public Service Loan Forgiveness and income-driven repayment. The bill also halts all involuntary collections, which include wage garnishments and loss of tax refunds. It also ensures that borrowers who are in default will not have other emergency money provided by the federal government seized.
“The bill also includes funding to bolster the Education Department’s ability to administer these benefits; it will be critical that student loan borrowers are able to access these benefits quickly and seamlessly both now and in the aftermath of the crisis.
“However, the bill’s student loan relief provisions last only six months and fail to address the urgent needs of struggling borrowers that will certainly remain beyond that time period — such as students who were left impoverished by predatory for-profit colleges and who have submitted borrower defense claims left to languish by the Department of Education.
“The bill also unfortunately fails to extend benefits to all types of student loans. Specifically, older guaranteed FFEL (Federal Family Education Loan Program) debt that is not owned by the federal government and campus-based Perkins loans are excluded from this bill, as are private education loans. We urge policymakers and the Education Department to address this coverage gap immediately.
“In addition, the CARES Act includes necessary provisions to temporarily relax certain regulatory requirements to allow colleges flexibility to effectively address unprecedented interruptions to their operations. We commend Congress for preserving critical accountability and oversight functions by rejecting an earlier proposal to give the Education Secretary sweeping authority to waive statutory and regulatory provisions for both K-12 and higher education. In particular, the necessary rush to online education without regular approvals, while needed now, should not prevent later scrutiny of these programs.
“We applaud Congress for moving quickly to provide significant relief to Americans. However, action can’t stop here. It will be crucial for lawmakers to include additional funding to shore up students and institutions in future stimulus packages.
“Both Congress and the Administration still have a long to-do list. This is the first recession in which student debt is a central factor in the economy, and aggressive action is needed to protect borrowers, stimulate the economy, and prevent a new student debt crisis.”
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