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AG Shapiro To Betsy DeVos: Relief Needed Now for Student Loans Amidst Crisis, Skyrocketing Unemployment

March 26, 2020 | Topic: Consumers

HARRISBURG—Attorney General Josh Shapiro today led a coalition of 27 attorneys general from around the nation calling on the U.S. Department of Education to use their emergency powers to provide federal student loan borrowers with help during this time. In a letter to Education Secretary Betsy DeVos, the coalition asks the Department to take specific steps to protect borrowers from further financial burden and debt collection due to job losses and lost wages resulting from the rise in national unemployment in the last few weeks.

“Right now, Pennsylvanians are losing their jobs at historic rates and need to pay for groceries and keep their families healthy,” said Attorney General Shapiro. “Secretary DeVos must act immediately to provide relief for those in need. Using her authority to suspend loan payments is in the best interest of all Americans during this emergency.”

Today’s letter, co-led by Attorney General Shapiro and New York Attorney General Letitia James, urges the Department to immediately implement emergency measures to protect federal student loan borrowers. The letter notes that while the Department has already taken a series of initial steps to help student loan borrowers — including ceasing some collection actions — the Department of Education must do more, including:

1) Ensuring that all new and continuing involuntary collection activities are halted for all federal student loan borrowers for the duration of the crisis. The Department’s recent announcement was unclear on the extent of its order, so we ask that the Department ensure that all affected borrowers will benefit from your recent action.

2) Automatically enrolling all federal student loan borrowers who are in or enter into forbearance, who are or become delinquent on their loans, or who request enrollment in an Income Driven Repayment (IDR) Plan in an IDR plan with a $0-per-month payment, without requiring submission of an IDR application, verification of income, or recertification for the duration of the crisis. This would permit struggling borrowers to suspend payments while continuing to make progress toward Public Service Loan Forgiveness or IDR loan forgiveness.

3) Extending eligibility for all additional relief available pursuant to previously announced modifications for those affected by national emergencies to all federal loan borrowers for the duration of the crisis.

The coalition’s letter urges the Department to extend this emergency relief to all federal student loan borrowers, including borrowers whose Federal Family Education Loans or Federal Perkins loans are not held by the Department of Education.

Joining Attorney General Shapiro and Attorney General James in signing today’s letter to the Department of Education are the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, Wisconsin, the District of Columbia, American Samoa, and Puerto Rico.

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