COVID-19 Perkins Loan Relief Act would add additional restrictions.
6/24/2020 11:30
A bipartisan bill from U.S. Reps. Katie Porter, D-Calif., Elise Stefanik, R-N.Y., Susie Lee, D-Nev., Lori Trahan, D-Mass., and Alma Adams, D-N.C., would expand the reach of the student borrower protections included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, according to a news release from Porter’s office.
The COVID–19 Perkins Loan Relief Act would cause nearly 2 million borrowers with Perkins loans to forgo making payments on those loans until October.
While the CARES Act suspended payments on federal student loans, specifically Direct loans and Federal Family Education Loans (FFEL) that are owed to the U.S. Department of Education, it did not address recipients of Perkins loans and commercially-held FFEL loans.
The legislation would sweep in Perkins loans. Rep. Porter is also a cosponsor of U.S. Rep. Stefanik’s Equity in Student Loan Relief Act which provides these same supports to FFEL borrowers.
ACA International recently sent a letter outlining concerns with sweeping efforts limiting communications with student loan borrowers.
ACA urged Congress to consider that while well intentioned, certain legislative efforts that prevent vital communications that empower consumers to understand their repayment options, relief, and possible forbearance during this crisis, may not actually benefit these consumers. Impeding the ability to communicate, means cutting off the ability to learn about ways to protect your financial health.
The letter stated, “For example, PCAs can assist student loan borrowers to consolidate their loans to receive additional benefits such as income-based repayment, 0% interest, or information about halting payment entirely. The Perkins Loan Program does not provide income-based repayment unless a consumer consolidates loans. Thus, speaking with a professional debt collector and understanding options is in a consumer’s best interest. Knowing about these types of benefits through an open dialogue enables consumers.”
ACA will continue to follow the progress of this legislation and to advocate for legislation that balances protecting students directly impacted by COVID-19 with any negative consequences that result from overly broad legislation.
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