Advisory: Letter to U.S. Department of Education

National coalition urges Secretary DeVos to protect student loan borrowers as the end looms for CARES Act relief

8/6/2020 | Olympia, WA—Default on student loans, pay rent, buy groceries, or keep the lights on? These are the difficult choices many student loan borrowers will face on Oct. 1—less than two months from now—unless U.S. Department of Education Secretary Betsy DeVos intervenes. That’s why a national coalition of state student loan advocates, including Washington’s, is calling on Secretary DeVos to extend pandemic relief for student loan borrowers beyond Sept. 30, 2020.

“It is unacceptable to make borrowers resume their payments in two months, given the current economic situation,” says Washington State Student Loan Advocate Stephanie Sampedro. “The Department can—and should—extend relief until Sept. 30, 2021. They have the authority, and it’s the right thing to do.”

Initially, the U.S. Department of Education granted 60 days of relief to borrowers who lost their jobs because of COVID-19. Then, the CARES Act expanded and extended relief for student loan borrowers until Sept. 30.

Back in March, these expectations for quick economic recovery may have seemed plausible. But not now.

More Americans are contracting the virus, and the pandemic’s economic fallout has left over 17 million people unemployed. Meanwhile, calls for extending moratoriums on evictions indicate that many Americans can’t afford basic living expenses. If people can’t afford shelter and food, they can’t afford to pay their student loans. But starting Oct. 1, that’s what millions of borrowers will have to do or face the consequences of defaulting.

With CARES Act relief scheduled to sunset Sept. 30, the national coalition of student loan advocates has sent a formal letter to Secretary DeVos, requesting specific protections for student borrowers.

Expand the scope of existing protections to include borrowers who are currently excluded.
Extend the duration of relief for federal student loans to Sept. 30, 2021.
Ensure the U.S. Department of Education’s contracted student loan servicers are prepared for millions of accounts to change status simultaneously after Sept. 30.
Streamline access to repayment programs, like income-driven repayment programs, which could allow many federal student loan borrowers to make low or $0 monthly payments.

The coalition points out that all of these actions are well within Secretary DeVos’ broad authority to protect student loan borrowers. In addition to Washington, the coalition includes student loan advocates from New York, Illinois, Nevada, Virginia, Maine, Colorado, and the District of Columbia.

Background

CARES Act relief for student loan borrowers

On Mar. 27, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act as an economic stimulus bill. The law provided a variety of forms of economic relief. The relief for federal student loans included six months of automatic payment suspension and reduced interest rates to zero percent.

However, the CARES Act only applied to federal student loans owned by the federal government. It did not apply to:

Federal Family Education Loan Program (FFELP) borrowers whose loans are owned by commercial lenders.
Perkins Loan borrowers whose loans are owned by their schools.

The coalition’s letter seeks to correct this error. Borrowers play no role in deciding who owns their loans, so they should receive equal treatment.

National coalition of student loan advocates

In recent years, states have begun taking action to protect their student loan borrowers. Some states have created student loan advocates, with varying scopes of responsibility and authority. Generally, these state officials address the problems of student loan borrowers and discuss solutions. They also have a role in educating consumers. The advocates provide educational materials and outreach to ensure that future college students are wise consumers of education loans, which make postsecondary education possible for many students.

Washington State’s student loan advocate

In Washington, the Office of the Student Loan Advocate is housed in the Washington Student Achievement Council.

Learn more about steps student loan borrowers in Washington can take to prepare for the end of CARES Act relief.
Student loan borrowers in Washington can also visit the state’s Student Complaint Portal to request information or help.

Washington Student Achievement Council

The Washington Student Achievement Council is committed to increasing educational opportunities and attainment in Washington.