Ideas for Getting Loan Borrowers Back Into Repayment

Ruben Onsu

Five groups have issued a set of recommendations on “successfully transitioning federal student loan borrowers back into repayment.” A memo from the groups said, “Even before the COVID-19 pandemic, many student loan borrowers were struggling, with more than a million borrowers going into default each year. To mitigate the challenges […]

Five groups have issued a set of recommendations on “successfully transitioning federal student loan borrowers back into repayment.”

A memo from the groups said, “Even before the COVID-19 pandemic, many student loan borrowers were struggling, with more than a million borrowers going into default each year. To mitigate the challenges facing borrowers during the pandemic, the Biden administration extended the pause on payments, interest, and collections for most federal student loan borrowers through September 30, 2021. When the pause ends, tens of millions of borrowers will move back into repayment simultaneously. The difficulties borrowers face are likely to persist even as the economy re-opens and the COVID crisis subsides.”

The groups urged the government to “provide intensive, targeted outreach to borrowers who demonstrated signs of struggle before the pause,” to “provide clarity on auto-debit payments,” to “provide additional flexibilities to borrowers who exhibit signs of stress after the pause ends,” to “require student loan servicers to maintain a skilled workforce and ensure proper servicer oversight” and to work for longer-term solutions.

The memo was from the Center for American Progress, New America Higher Education Program, the National Association of Student Financial Aid Administrators, the Institute for College Access & Success, and the Pew Charitable Trusts’ Project on Student Borrower Success.

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