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Several associations representing the nation’s colleges and universities on Wednesday urged congressional leaders to continue excusing student loan borrowers from having to make payments until at least after next Tax Day in April.
The letter from the American Council on Education and 46 other higher education groups puts them in opposition to the Senate Republican proposal for the next coronavirus relief package. The previous package passed by Congress, the CARES Act, had excused borrowers from making payments during the pandemic-caused recession through Oct. 1.
Under the Republican proposal, borrowers with incomes would have to begin making payments again on Oct. 1, though they would not have to pay more than 10 percent of their discretionary income after essentials like food and housing. Those without incomes would continue to be excused from paying back their loans.
However, the groups joined congressional Democrats in raising concerns that requiring many of the 43 million Americans with student loans to resume payments would hurt those who may be employed but are struggling during the recession.
"Student loan relief assists borrowers who would otherwise struggle to repay their loans, freeing up money to be used on urgent needs during this crisis," wrote the groups, including the Association of American Colleges and Universities, the American Association of Community Colleges, and the American Association of State Colleges and Universities.
They noted as well that it would reduce confusion among borrowers and simplify the task of administering changes for the Education Department.
Senator Lamar Alexander, the Republican chairman of the Senate education committee, who made the proposal, has argued the plan would simplify loan repayments. Under the proposal, borrowers would have the option, as well, of paying back their loans through fixed annual amounts over 10 years. Alexander said his plan is simpler than the current system, in which borrowers have to choose from among nine repayment options.
The groups agreed changes are needed. “The pandemic has heightened the problems borrowers experience in attempting to navigate the federal student loan system, and has made clear that substantial changes to simplify and streamline this system are necessary,” they wrote. “Such changes are complicated though, and will require substantial time and attention to implement correctly.”
However, the question of excusing more borrowers from making payments comes as the higher education groups are seeking more aid in the coronavirus package. "College leaders will have to decide which is more important: help to colleges and current students that are hurting or free money to people with paychecks coming in," an aide to Senate Republican leadership said.
