ACE, Higher Education Associations Advocate for Relief for Student Loan Borrowers
April 20, 2020

ACE and 31 other higher education associations are asking Congress to provide relief to the 13.7 million students borrowing to finance their college education and to the 44 million borrowers already in repayment.

“We know that the pandemic will greatly hamper the ability of many of these individuals to repay their loans, and this in turn will strain the economy unless Congress moves quickly to provide needed, targeted relief to student loan borrowers," the associations wrote in a letter to House and Senate leaders.

Loan relief for students and borrowers offers important short- and long-term benefits, both to individuals and the overall economy, and should be targeted to meet the needs of borrowers who face the greatest difficulty repaying their loans.

“By making a college education more affordable, Congress can ensure students do not drop out due to sudden changes in their financial circumstances and that prospective students are able to begin postsecondary education," the letter states. “By providing loan relief to borrowers who have already left campus, Congress would ensure that more money is available for their immediate needs, and that additional financial security is available to Americans struggling in these difficult times."

Borrower relief is also critical to sustaining higher education in an uncertain period. Institutions of higher education employ nearly four million faculty and staff in communities nationwide and in every Congressional district.

The proposed near-term relief for all borrowers would be effective until June 30, 2021 or until the unemployment rates remains below 8 percent for three consecutive months. Among the proposals offered are: 

  • Extending the relief provided by the CARES Act by continuing both zero-interest deferred repayments for borrowers and the suspension of collection activities (wage garnishment, offsets, etc.) for borrowers who have defaulted on any type of federal student loan during the specified time frame.

  • Extending the post-graduation grace period for one year for students leaving school to help them gain their financial footing after graduation. 

  • Providing a 1.5 percent interest rate and eliminating origination fees for any loan disbursed after enactment of the upcoming fourth supplemental appropriations bill and before the expiration of the specified time frame, to encourage all students (and their parents) to begin or continue their college careers.

In addition, the associations propose two additional measures for longer-term relief:
Restoring bankruptcy protections for borrowers facing persistent financial distress, and ensuring that any loans that are forgiven do not impose a tax penalty on borrowers, as they do at present.

To see the full letters to the House and Senate, click here and here.