The United States Public Interest Research Group announced Tuesday that a newly announced agreement will protect the finances of millions of Americans who owe money on student loans.
Last month’s CARES Act put all federally held student loans into forbearance through September, ended collections and other actions against defaulted borrowers, and stopped the accrual of interest; however, these benefits were not extended to borrowers whose loans are held by private lenders.
To protect those former students, leaders from California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, Vermont, Virginia, and Washington worked with private lenders.
“We thank Governor Pritzker and IDFPR Secretary Hagan for securing this much-needed relief for student loan borrowers. Many Illinois residents were struggling to afford payments even before this pandemic, and rising unemployment is going to push many more into default. This agreement takes a big step towards providing relief to borrowers with privately held loans who the CARES Act didn’t help, but private loan servicers need to do more.
“To better provide relief to borrowers, forbearance and other benefits should be automatically applied to all loans. The high demand for payment relief will crash already-overwhelmed customer service staff at these lenders and result in borrowers being unable to access relief. We urge private lenders to follow Congress’ lead and make forbearance automatic and stop interest from accruing, and call on students’ alma maters to offer relief to students with Perkins loans.”