A group of consumer advocacy organizations have published a guide to help individuals with student loans navigate their way through the COVID-19 pandemic and beyond, offering a “roadmap” to provide “substantial relief” to the 44 million individuals who have student loan debt.
Among the ideas published in the guide are:
- Cancel student loan debt to reduce the amount owed by individuals paying off their student loans. Doing so “will spur economic recovery,” according to the report.
- “Clear the books” of debts held by individuals who have been repaying their student loans for at least 15 years, in default for three years, and those held by individuals who have been receiving federal “means-tested benefits” for three or more years.
- Establish a statute of limitations on collecting student loan debt, limiting how much can be seized from individuals and for how long creditors can involuntarily collect, and make student loan debt dischargeable in bankruptcy.
- Auto-enroll individuals on an income-driven repayment program who are 30 days or more delinquent when the pandemic ends into new plans.
“The COVID-19 recession is on track to last for years, and student loan borrowers need real relief to navigate it,” wrote the report’s authors, who work at the National Consumer Law Center and the Center for Responsible Lending. “If we are serious about helping communities of color and spurring economic recovery, student debt relief must be a part of the solution. The student loan system has been broken for too long; it is time to clear the books and provide borrowers a path forward.”
Should the federal government cancel $50,000 of student loans for every individual, it would wipe out the amount owed for more than 75% of those who have student loan debt, according to the report.
