Washington, D.C. — Last week, the Biden administration extended the pause on student loan repayment through August 2022—an important step that will allow the 41 million borrowers to focus on meeting their basic needs and support the country’s broader economic recovery. Following this announcement, a new column released today by the Center for American Progress outlines why this pause should be further extended until the federal government makes critical reforms to the servicing and repayment systems.
“It is important to ensure that when repayment begins, the system is set up to serve borrowers well,” said Jared Bass, senior director for Higher Education at CAP. “Doing so will help strengthen the economy, improve racial equity, and restore the promise of higher education.”
The column points to the fact that a number of servicers withdrew from working on federal student loans in the past year, creating the potential for a chaotic return to payment. Meanwhile, the U.S. Department of Education is working on major improvements to servicing, but those changes will not be live until at least the end of 2023. The column also calls on the Biden administration to fix the income-driven repayment program by setting up a better plan for borrowers who will enter repayment in the future as well as providing relief to those who have already been harmed by poor servicing and badly designed programs.
Click here to read: “The Case for a Longer Student Loan Repayment Pause” by Bradley D. Custer and Marcella Bombardieri
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