Comprehensive witness panel discusses student loan debt forgiveness and its role helping student loan borrowers during hearing Tuesday.
4/14/2021 9:00
The Senate Committee on Banking, Housing and Urban Affairs Subcommittee on Economic Policy met Tuesday for a hearing on “The Student Debt Burden and Its Impact on Racial Justice, Borrowers, & The Economy.”
Subcommittee Chair U.S. Sen. Elizabeth Warren, D-Mass., invited Navient President and CEO Jack Remondi, an ACA International member, to testify.
Remondi’s testimony focused on the benefits of higher education and how student loan servicers can help borrowers manage their payments.
The U.S. Department of Education’s federal student loan forbearance, pause in interest accrual, and suspension of collection activity on federal student loans will continue until at least Sept. 30, 2021, ACA previously reported.
ACA’s members have hardship programs in place to help consumers and encourage them to reach out with questions on their loan payments, even during the forbearance period.
“While today’s hearing is focused on the problems with today’s loan program, it is important to recognize the good the program achieves,” Remondi said in his prepared testimony. “We see evidence—day in and day out—of people who have successfully attained higher education achievements and upward economic mobility because of the financial assistance from federal student loans. These individuals make a difference in our communities with their education, which for some could only be achieved through borrowing.”
Remondi reviewed three actionable solutions to the federal student loan burden in his testimony:
- Increase assistance to those who borrowed in the past but did not attain their hoped-for education outcomes and are unlikely to do so in the future.
- Implement faster forgiveness programs for current and future borrowers, through enactment of a “Forgive-As-You-Go” plan.
- Provide better support before people borrow and while they are in school to help more students achieve their goal of graduation.
“While many have benefited from a college degree made possible with student loans, the system has not worked for all,” Remondi said in his testimony. “Through my regular call listening, I hear the challenges some borrowers face, including people who left school with debt but no degree, or student borrowers who discovered too late that the value of their education did not match the debt they took on. And even for many people of color who have earned a college degree, the racial wealth gap has widened. Importantly, there are steps that can be taken to improve the system and address the unfairness that pervades it—especially unfairness that creates barriers for people of color. Navient stands ready to work with policymakers, members of Congress, and the Biden-Harris administration to bring about important reforms.”
Introductory discussions during the hearing also focused on income-driven repayment of student loans, default rates, and the options for executive action by the Biden administration to forgive student loan debt discussed by witnesses included U.S. Rep. Byron Donalds, R-Fla., in his prepared testimony.
Witnesses in the hearing also included U.S. Rep. Ayanna Pressley, D-Mass.; Massachusetts Attorney General Maura Healey; President and CEO of the Pennsylvania Higher Education Assistance Agency James H. Steeley; American Enterprise Institute Resident Scholar Beth Akers; Assistant Professor of Finance Booth School of Business, University of Chicago Constantine Yannelis; student loan borrower Darimir Perez; Committee for a Responsible Federal Budget Policy Analyst Alexander Holt; Marriner S. Eccles Institute Executive Director Adam Looney; Southern Methodist University Assistant Professor of Education Policy Dominique Baker.