PRESSLEY, WARREN, 70 MEMBERS OF CONGRESS URGE TRUMP ADMINISTRATION TO ADDRESS STUDENT LOAN "DEFAULT CLIFF" TO PREVENT ECONOMIC DISASTER
The following information was released by the office of Massachusetts Rep.
Republican policies have pushed record numbers of borrowers into default and delinquency
"[T]his devastating increase in past due payments threatens not only individual borrowers but the broader economy."
Today, Congresswoman
Recent data suggests that over 5 million student borrowers are likely in default, and almost a third of borrowers are delinquent. This "default cliff" threatens the broader economy by suppressing consumer spending and locking families out of housing and other financial opportunities as their credit scores plummet.
"Every day this Administration fails to act, more borrowersespecially low-income, Black, and brown borrowersare pushed closer to financial catastrophe," said
"If the administration fails to act, millions of Americans will be pushed to financial ruin, and Trump and
Rather than address this problem, the
"[T]his default cliff threatens not only individual financial hardship but also has broader economic implications that warrant immediate intervention and mitigation strategies," wrote the lawmakers.
The coalition urged the Trump administration to take the following steps to address the default cliff:
Clear the nearly 1.1 million borrower backlog of IDR applications and abandon its plans to mass deny nearly
Create an interest-free temporary default prevention forbearance to protect borrowers who cannot afford their monthly payments;
Reverse all recent decisions that have increased costs for borrowers and raised the likelihood that they enter default or delinquency;
Begin a strong outreach campaign, in coordination with members of
Pause the forced collections process until the above steps have been implemented and until the
"The student loan default crisis is a significant threat to millions of American families and the broader economy.
The coalition requested that, in order to inform their legislative responsibilities regarding the federal student loan system and the functioning of the
"Instead of bringing down costs,
Democratic Leader
Representatives
A copy of the text of the letter can be found here.
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