When the U.S. government bailed out student loan lenders during the Great Recession, legislators unintentionally set off a series of cascading events that has left more than 6 million student loan borrowers locked out of a crucial benefit more than 10 years later amid the coronavirus pandemic.
Two consumer advocacy groups are pressing the Biden administration to change that.
“The Trump administration exercised executive authority to cancel student loan interest charges and pause loan payments for over 40 million federal student loan borrowers,” a joint letter from the Student Borrower Protection Center and the National Consumer Law Center stated in a recent letter to the Education Department’s (ED) Acting Secretary Philip Rosenfelt. “The Biden administration can and should use the same tools to finally offer immediate relief to millions of federal student loan borrowers who have been left behind.”
While the vast majority of the roughly 46 million U.S. student debtors are included in the interest-free payment pause, first enacted by former President Donald Trump in March 2020 and extended to September 2021 by President Biden, roughly 6 million borrowers holding about $160 billion in debt with commercially-held Federal Family Education Loan Program (FFELP) loans have been left out.
A spokesperson from ED confirmed that the agency had received the letter and “are taking a close look at options for addressing the needs of FFELP borrowers who are experiencing financial hardships.”