New Dems, Led by Rep. Andrea Salinas, Call for Additional Resources to Prevent Student Loan Repayment Crisis
Yesterday, New Democrat Coalition (NDC) Member Rep. Andrea Salinas (OR-06) led a letter with NDC Reps. Brittany Pettersen (CO-07) and Yadira Caraveo (CO-08) to House and Senate leadership calling for any upcoming government funding package to include President Biden’s supplemental request to ensure student loan repayments restart smoothly and efficiently.
President Biden’s request for $2.3 billion in additional funding for the Department of Education’s Student Aid Administration will be instrumental in ensuring the tens of millions of borrowers who restart payments in October avoid confusion, frustration, or financial harm.
“In the three years since loan repayments were paused, loan servicers have drastically reduced their staff and significantly cut call center hours,” said New Dem Rep. Salinas. “As borrowers resume payments in the coming weeks, it is critical that Congress provide the additional funding necessary for loan servicers to hire more staff and expand call center hours to help borrowers successfully navigate the restart.”
The letter reads in part:
“Two successive administrations maintained the student loan repayment pause to assist Americans across the country through the economic hardships posed by the pandemic. It is imperative Congress adequately fund the return to loan repayment to build on that critical assistance. We urge you to take swift action to ensure borrowers are set up for success in the return to repayment and are committed to working with you and the Administration to support such efforts.”
You can read the full letter to House and Senate leadership here and below:
Dear Speaker McCarthy, House Minority Leader Jeffries, Senate Majority Leader Schumer, and Senate Minority Leader McConnell,
We write to advocate for the inclusion of the Biden Administration’s request of an additional $2.3 billion in resources to the Department of Education’s Student Aid Administration in any government funding package. This funding is critical to assist borrowers across the country as the federal student loan repayment pause ends. As of September 1, interest began to accrue on student loans. In the coming weeks, tens of millions of borrowers will start making payments for the first time in over three years, and many for the first time ever. It is imperative that Congress provides additional funding to restart the student loan repayment system as smoothly and efficiently as possible.
The scale of this return to repayment presents an unprecedented challenge. Every borrower whose payments have been paused is due to receive a bill in October and the Biden Administration recently announced a new income-driven repayment plan. These changes set up a potentially difficult climate for borrowers to navigate under current funding levels. During the repayment pause, servicers undertook massive layoffs and reduced their call center hours. As a result, borrowers in every state will encounter significant wait times as they attempt to reach their loan servicer for information on their payments. Many borrowers have changed contact information or have had their accounts moved to a different servicer without any action on their part, complicating communication between borrowers and servicers. The Administration’s $2.3 billion request for additional funding will increase staffing at call centers and reinstate more evening and weekend hours. These resources will allow borrowers to quickly reach their loan servicers with inquiries, ensuring an efficient return to student loan repayment.
In the best interest of borrowers, Congress must provide additional funds now to prevent the looming crisis of confusion, frustration, and financial harm. Two successive administrations maintained the student loan repayment pause to assist Americans across the country through the economic hardships posed by the pandemic. It is imperative Congress adequately fund the return to loan repayment to build on that critical assistance. We urge you to take swift action to ensure borrowers are set up for success in the return to repayment and are committed to working with you and the Administration to support such efforts.
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