Teachers’ unions join 55 organizations opposing stimulus bill that excludes student loan relief
The American Federation of Teachers and the National Education Association – the two largest teachers’ unions in the country – have joined the Student Borrower Protection Center, Americans for Financial Reform and more than 50 other organizations to to oppose the recent proposal to relaunch the Senate GOP.
Congress previously suspended all payments, interest and collections on federal funds held by the government. student loans under the CARES Act, which was enacted in April. But those protections are expected to expire on September 30, 2020. As a result, millions of student loan borrowers will face student loan bills and collections, even as the pandemic and high unemployment rates persist.
This week, Senate GOP leaders unveiled the Safe Return to School and Return to Work Act as a solution to the looming student debt crisis. The bill would simplify the student loan repayment system, and would include an income-based repayment option that would allow non-earning student loan borrowers to have no monthly payment obligations. “When you start earning an income, your monthly payment will never exceed 10% of your income,” said Sen. Lamar Alexander (R-Tenn), the main sponsor, in a declaration.
However, this proposal is virtually identical to the Revised Pay As You Earn (REPAYE) repayment plan, which already exempts borrowers earning less than 150% of the poverty line from any payment obligations, and caps student loan payments from other borrowers. at 10% of their discretionary income. The Senate GOP bill does not include an extension of the student loan forbearance provisions of the CARES Act, nor any other relief such as student loan cancellation.
“The provisions of the president’s proposal reflect many solutions for borrowers that already exist,” 56 organizations wrote in their letter to Senate leaders. “Since the current health and economic crisis has no end in sight, Congress should bring real relief to student borrowers … Rather than allowing already limited relief to expire, Congress should pass legislation extending the hiatus. repayment of at least one year, extends eligibility for this repayment suspension to include 2020 graduates and the 9 million borrowers excluded by the CARES Act, and includes more significant relief for borrowers during the pandemic through cancellation of student debt. ”
The organizations noted that racial and gender disparities persist in higher education and student debt. “Black graduates borrow at higher rates due to a history of racial exclusion policies that have resulted in persistent racial inequalities in income and wealth. On average, black borrowers owe $ 7,400 more in student loans than their white counterparts. Black Americans and Latin Americans have also been disproportionately affected by both public health and the negative economic consequences of the Covid-19 pandemic, ”the organizations wrote.
The 56 organizations also expressed serious concerns about other elements of the Senate plan, including the exclusion of Parent PLUS borrowers from any relief, loss of credit to the civil service loan forgiveness program, and resumption of debt. forced collections for defaulting borrowers, including involuntary set-off. social security benefits.
Other organizations that have joined letter include the Center for Action on Race and the Economy, Consumer Reports, the National Urban League and Public Citizen.
House Democrats passed the HEROES Act in May, which would extend the payment of student loans and the CARES Act interest suspension for an additional 12 months, and also provide $ 10,000 in federal funds and private student loan forgiveness to borrowers in economic difficulty. GOP Senate leaders rejected the HEROES law without taking a formal vote.
Discussions in Congress are continuing and it is possible that there will be compromise legislation between House Democrats and Senate Republicans.