More Student Loan Debt Relief on the Way

Meanwhile, Sens. Warren and Brown along with 10 other Democratic senators, including Bernie Sanders, D-Vt., and Amy Klobuchar, D-Minn., have written to leading servicers of private student loans, including Wells Fargo, Navient and Sallie Mae, asking them to provide immediate relief to private student loan borrowers. They want those companies to provide essentially the same relief that federal student loan borrowers were given in the recently passed CARES Act (short for Coronavirus Aid, Relief and Economic Security). That relief includes a six-month suspension of payments for federal student loans, with no interest charged.

More specifically, the senators are asking those companies to suspend loan payments without fees or consequence, ensure that payment suspensions don’t trigger consequences for co-signers of loans and halt all all involuntary collection efforts. They’re also asking that loans of distressed borrowers be canceled or discharged and loan modifications and affordable repayment options be expanded.

“We will continue to fight for legislation that includes aggressive policies such as broad debt cancellation for all student loan borrowers … We, however, believe that your company also has a responsibility to do more during the COVID-19 crisis,” the senators wrote.

Warren, Brown and Sens. Dick Durbin, D-Ill., and Richard Blumenthal, D-Conn., have also asked the U.S. Department of Education to focus the $14 billion emergency relief funds for students and colleges and universities included in the CARES Act on public and not-for-profit institutions. If the DOE expects relief will also be available to for-profit colleges, the senators want the department to adopt policies that will prevent those colleges from using funding for anything other than direct student aid.

— Check out 8 Ways the Stimulus Package Helps Student Loan Borrowers on ThinkAdvisor.