August 6, 2020
Carson City, NV –Nevada
Attorney General Aaron D. Ford is urging the U.S. Senate to provide relief for
all federal student load borrowers impacted by the COVID-19 pandemic. The
Coronavirus Aid, Relief, and Economic Security Act (CARES Act) currently only
covers federal student loans owned by the federal government, excluding nearly
8 million borrowers whose federal student loans are owned by private entities.
“Nearly 30% of Nevadans are
now unemployed,” said AG Ford. “As many struggle to put food on the
table and keep up with everyday necessities, paying student loans is an another
burden. I’m urging the Senate to expand loan relief to students with federal
loans owned by the federal government.”
In March 2020, Congress passed
the CARES Act, which provides financial relief for Americans, including student
loan borrowers impacted by the global pandemic. Under the CARES Act, student
loan borrowers do not have to make payments, and interest will not accrue on
their loans through September 30, 2020. The CARES Act also suspends involuntary
collection activities and negative credit reporting through this time. While
this relief is critical, the CARES Act only applies to federal student loans
held by the federal government.
Nearly 8 million federal
student loan borrowers have Perkins loans that are held by schools, or
commercially-held Federal Family Education Loan Program (FFEL) loans that are
held by financial institutions. While the federal government supports or
guarantees these loans against default, borrowers were denied CARES Act relief.
These borrowers are struggling with the pandemic just as other federal student
loan borrowers are, but do not have relief options under the CARES Act solely
because of the entity that owns their loan.
In the letter, the coalition
urges the Senate to provide the same relief currently available to borrowers
whose federal student loans are owned by the federal government, including a
temporary suspension of payments, a 0% interest rate, and the suspension of
involuntary collections. The coalition also calls for the relief measures to
apply retroactively if borrowers have already made payments. The attorneys
general state that members of the Senate can support added relief as part of a
stand-alone bill – the Student Loan Fairness Act, S.4237 – recently introduced
by Senators Lisa Murkowski of Alaska and Jack Reed of Rhode Island, or as part
of the larger Coronavirus relief package currently being debated in the Senate.
In addition, recognizing that
the effects pandemic will be long-lasting, the coalition calls on Congress to
implement longer-term solutions for struggling borrowers. Such measures include
extending the temporary suspension of payments past Sept. 30, 2020 and
requiring student loan servicers to evaluate borrowers for income-driven
repayment plans once they resume payments.
In addition to Nevada,attorneys general from the following states joined the
letter: Alaska, California, Colorado, Connecticut, Delaware, the District of
Columbia, Guam, Hawaii, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Nebraska, New Jersey, New Mexico, New York, Oregon,
Pennsylvania, Rhode Island, Vermont, Virginia, Washington and Wisconsin.
A copy of the brief can be
found here.