When the federal government declared the coronavirus pandemic a national emergency in March, Christopher Granado continued sending $730 each month to pay his federal student-loan bill.
Since March, amid the economic devastation wrought by the pandemic, Granado and these borrowers have continued to receive student-loan bills and watch the interest on their debt build. If they’ve defaulted on their loans, they’ve had their wages garnished or tax refunds seized to repay them.It’s a student debt that’s owned by a bank or commercial lender, and backed by the government.
Once McDermott-Coffin got her degree she began a job at a New York state prison. She ultimately became the director of the mental health clinic at a maximum security women’s prison and worked in the prison system for twelve and a half years. Now, despite her career in public service, McDermott-Coffin and her husband are in their 70s and still working, in part to repay the debt. They’ve been able to afford the roughly $600 monthly bill that hasn’t been paused during the pandemic because they’ve both stayed employed. McDermott-Coffin works for a nonprofit agency seeing patients in person and through telehealth.
For months, borrower advocates have been calling on Congress to include these borrowers as they consider student-loan provisions in the context of coronavirus relief bills. Now, some are urging the Department of Education to use its authority to create a pathway for these borrowers to be included in the payment pause.
Even for those borrowers who are can consolidate, taking that step, would, in many cases, hike their interest rate and they’d lose any progress towards debt cancellation under income-driven repayment, a program that allows borrowers to pay down their debt as a percentage of their income for at least 20 years and have the outstanding balance discharged.
The Department received the letter, a spokesperson confirmed in an email and plans to respond to it directly. The agency is, “taking a close look at options for addressing the needs of FFEL borrowers who are experiencing financial hardships,” the email reads. During the Clinton administration, the government piloted a program making student loans directly to borrowers, but it remained a small portion of the federal student loan portfolio due in part to objections from lenders and guarantors.
In an effort to control college costs why not allow better loan rates ? In seams ridiculous that some student loans are near 10%. How can I get a mortgage rate at a third of that rate? Poor kids get educated + spend their entire life paying it back pausing life bc of debt.
Don’t forgive anyones loans. You wont have to worry about who it helps and doesn’t help. Nobody’s coming in forgiving my credit card balance or my car loan or mortgage. I signed it I’ll pay it.
thanks
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