October 27, 2020
WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) and a group of 33 Senators sent a letter urging Secretary of Education Betsy DeVos to ensure all struggling federal student borrowers can gain access to crucial federal relief. In their letter, the Senators pressed Secretary DeVos to immediately contact borrowers currently missing out on relief and help them consolidate their loans into qualifying loans. They also urged Secretary DeVos to use her administrative authority to improve the consolidation process for borrowers by waiving restrictions and penalties during the national emergency.
“The more than eight million student loan borrowers falling into donut holes of critical relief have missed out on needed benefits and suffered unnecessary complexity and confusion for more than six months,” wrote the Senators. “It is essential that the Department immediately begin the targeted outreach and take the actions we are requesting.”
Since March, the Coronavirus Aid, Relief and Economic Security (CARES) Act has provided forbearance, waived interest, and halted collections for borrowers whose student loans were directly held by the U.S. Department of Education. But, according to new information from the Department, 8.2 million federal student loan borrowers currently are barred from taking advantage of this relief, because some or all of their loans do not qualify. Of those borrowers, 4.4 million people are not receiving any relief, and 3.8 million people have a mix of loans that qualify and those that do not. To ensure that these borrowers don’t continue to face unnecessary financial struggles and confusion, in their letter, the Senators urged Secretary DeVos to take immediate action to help them qualify for much-needed relief.
Since the early days of the coronavirus pandemic, and onset of related financial hardships, Senator King has advocated for student loan borrowers. In July, he urged the Administration to end the seizure of tax refunds from federal student loan borrowers in default and refund any payments seized in direct violation of federal law. This seizure of tax refunds, known as a tax offset, violates a provision in the CARES Act that suspended the collection of all federally held defaulted student loans until September 30, 2020 – which was intended to provide relief to student loan borrowers experiencing financial strain during the coronavirus crisis and subsequent economic fallout.
The full letter can be read HERE.