Supporters still call for student debt forgiveness despite another pause in loan repayments, more money for Pell Grants, HBCU | Remark

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In recent days, student loans and other higher education programs have been the subject of multiple initiatives. On April 6, President Joe Biden extended the current pause on federal loan repayments until August 31. This announcement generated obvious appeal for the 44 million consumers who together owe approximately $1.7 trillion.

“I ask all student borrowers to work with the Department of Education to prepare for a return to repayment, review the forgiveness of public service loans, and explore other options to reduce their payments,” Biden said. .

A few days earlier, on March 28, the Biden administration submitted its budget proposal for fiscal year 2023 to Congress with a promise to “build the economy from the bottom up,” including more funding for appropriations. higher education from the Ministry of Education.

For example, about 6.7 million students from low- and middle-income backgrounds eligible for Pell grants would benefit from an increase in maximum grants of $2,175 in the 2021-2022 academic year. Similarly, an increase of $752 million from the level enacted in 2021 would strengthen the institutional capacity of Historically Black Colleges and Universities (HBCUs), Tribal Control Colleges and Universities (TCCUs). An additional $161 million for the Department’s Office of Civil Rights — a 23% increase from the level enacted in 2021 — would strengthen the agency’s ability to protect equal access to education through enforcement of civil rights laws, such as Title IX of the Education Amendments of 1972.

The increase in funding for higher education was, predictably, welcomed by HBCU stakeholders.

“[T]he request to increase the Pell Grant by $2,000 in the coming year is nothing short of a milestone,” said Lodriguez V. Murray, senior vice president of public policy and business. organizations of the United Negro College Fund (UNCF). “If Congress follows through on President Biden’s UNCF-backed request, this would be the largest single-year increase in the Pell Grant, putting us on track to double the Pell Grant this decade and be the one of the biggest game-changers for low-to-moderate income students in our country in modern times.

Also noting the importance of the Pell Grants as a “primary way to make college affordable” for 75% of HBCU students, the Thurgood Marshall College Fund (TMCF) which includes both state-funded HBCUs – More than 80% of all students attending HBCUs — and primarily — Black Institutions (PBIs) — also called on Congress to support the request to double the maximum Pell Grant award.

“TMCF looks forward to working with Congressional leaders, the Congressional Black Caucus and the Bipartisan HBCU Caucus to enact these historic proposals for the betterment of our institutions and their students,” said Dr. Harry L. Williams, President and CEO of the organization.

Yet other advocates have raised other issues beyond annual budget appropriations.

“While we commend the administration for allowing borrowers who were in default or delinquency to receive a ‘fresh start’ on their repayment plans and to reinstate repayment in good standing, their debts remain the same,” noted Jaylon Herbin, Outreach and Policy Manager with Responsible Credit Center (CRL). “Extending the payment pause once again is not enough to ensure financial fairness for the millions of Americans who have been disproportionately impacted by the burden of the pandemic.”

Herbin’s reaction repeated CRL’s earlier calls for debt cancellation as well as income-contingent repayment (IDR) reforms. This same goal is also shared by other consumer rights advocates.

A few months earlier, the CRL, the Student Borrower Protection Center, and the Student Loan Borrower Assistance Division of the National Consumer Law Center jointly released a guidance note titled Restoring the Promise of Income-Driven Repayment: An IDR Waiver Program Proposal, which draws attention to unmet problems. need to correct the key players and programs that also share responsibility for the country’s student debt dilemma.

“The historic failure of student loan servicers to retain low-income borrowers over the long term presents an immediate policy problem,” the brief states. “Because of these failures, millions of borrowers remain trapped in the student loan system for decades. For many, their only prospect of relief is to start over and spend additional decades waiting for debt cancellation as if they had just started the repayment.

“[O]Out of a total of 4.4 million borrowers in repayment for more than two decades, less than 200 student borrowers will benefit from debt cancellation under the IDR between 2020 and 2025, or a one in 23 chance. 000,” the document continues. “Borrowers also report that they have encountered a range of problems resulting from the incompetence of services, including processing delays and long periods of administrative forbearance, inaccurate denials, lost payment histories, lost documents and insufficient information or advice.These barriers have profound and lasting implications for millions of families.

In other words, to solve unsustainable student debt, increased funding for higher education must be accompanied by corrective efforts that hold loan servicers accountable and finally deliver on the promise to manage IDR as planned in the origin. Actions like these would make dreams of a college education as a gateway to middle-class life and financial independence come true. Without these reforms, higher education will continue to generate growing debts and payment defaults.

“The administration should provide student debt relief in the form of student loan forgiveness of $50,000 per borrower, an amount that would eliminate or significantly reduce the debt burden of low-income, black, and Latino borrowers. , would provide a critical boost to the national economy and help close the racial wealth gap,” Herbin concluded.

Charlene Crowell is a senior researcher at the Center for Responsible Lending. She can be reached at Charlene.crowell@ managerlending.org.

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