FOR IMMEDIATE RELEASE

May 12, 2020

CONTACT: Alexis Goldstein, alexis@ourfinancialsecurity.org

Statement on the Student Loan Cancellation Provisions of the HEROES Act

Statement from Alexis Goldstein, Senior Policy Analyst, Americans for Financial Reform, on the student loan relief provisions in the HEROES Act:

The HEROES Act provides needed relief to the 45 million student loan borrowers in the U.S., tackling the ongoing economic fallout caused by the coronavirus with an approach that research shows would boost the economy overall.

HEROES includes $10,000 in federal student debt cancellation, which would leave as estimated 16 million borrowers completely debt-free. It also extends the CARES Act suspension of student loan payments to September 2021, giving borrowers a chance to recover on the same timeline the economy is projected to need to return to pre-coronavirus productivity. And by ensuring all federal student loan borrowers are covered, it fixes the CARES Act gap that left one out of five federal student loan borrowers ineligible for relief. In addition, the HEROES Act also directs the Treasury to make private student loan payments for borrowers through September 2021, for a total of $10,000 in private student loan cancellation.

While the bill also adds an important ability for borrowers who consolidate their loans not to be forced to re-start the clock towards Public Service Loan Forgiveness, this important change should not be limited to the pandemic. We urge lawmakers to strengthen the bill and ensure that borrowers are never penalized for consolidating — at any time. 

The student debt relief in the HEROES Act means more funds for food, medicine, and basic household needs. It also provides the economic stimulus that student debt cancellation brings, and gives borrowers a much needed leg-up in digging out of this enduring economic crisis.

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