Sen. Brian Schatz and 13 senators called on student loan companies to allow borrowers to suspend payments without penalty and take additional steps to aid borrowers affected by the coronavirus (COVID-19) pandemic.
Letters were sent to Well Fargo, SLM Corporation (Sallie Mae), Navient, Citizens Financial Group, Discover Financial Services, the PNC Financial Services Group, Truist Financial Corporation, and other companies to provide immediate relief to private student loan borrowers.
“The outbreak of COVID-19 has resulted in an unprecedented and wide- spread public health and economic crisis, significantly upending life for every American,” Schatz and the lawmakers wrote. “For private student loan borrowers, these economic disruptions will be uniquely devastating due to private student loan borrowers’ lack of critical protections, forgiveness programs, and repayment options available to federal student loan borrowers.”
The Senators urged:
- Allow borrowers to suspend payments without
fees or consequences.
- Ensure that payment suspension does not trigger cosigner consequences.
- Immediately halt all involuntary collection efforts.
- Cancel or discharge loans of distressed borrowers. The letter urges companies to cancel or discharge as many delinquent loans as possible during this crisis, and especially the loans of borrowers who have filed for bankruptcy or who are otherwise in clear financial distress that will inhibit their ability to ever fully repay their loans.
- Expand loan modification and affordable repayment options. The letter urges companies to permanently provide additional, affordable repayment and loan modification options for private student loan borrowers, including options for borrowers who see long-term changes in their income.