Providing Second Chance to Struggling Student Borrowers
WASHINGTON – Chairman Robert C. “Bobby” Scott (VA-03) released the following statement applauding the Biden Administration for today’s announcement that the Department of Education will extend the pause on student loans through August 31, 2022. In addition, the Department is putting currently defaulted federal student loan borrowers into good standing and erasing the default from their credit history.
“Across the country, borrowers are continuing to face the economic fallout of COVID-19. By extending the pause on student loan repayments, collections, and interest accrual, the Biden-Harris Administration has demonstrated that it remains committed to helping borrowers get back on their feet. This extension also has the added benefit of providing the Administration more time to offer impacted borrowers in Income Driven Repayment plans a solution without actively collecting on student loans.
“Today’s announcement also offers millions of student loan borrowers a valuable opportunity to undo the extensive harm caused by a default. Defaulting on student loans often triggers a spiral of financial hardship for borrowers and their families. I applaud the Biden-Harris Administration for providing a second chance for struggling student loan borrowers by eliminating the harms of default and delinquency and allowing them to reenter repayment in good standing.
“As I have said before, we cannot let our guard down as we work to help Americans recover from the pandemic. I am glad that the Department of Education has the tools, authority, and competency to help prepare borrowers for the eventual return to loan repayment. Moving forward, the Department of Education must do everything in its power to help affected borrowers seize this opportunity to get back on track.”
The announcement comes after Chairman Scott issued a statement in March urging the Biden-Harris Administration to extend relief for student loan borrowers through the end of this year.