Press Release
ADVOCATES SEND LETTER OF SUPPORT URGING CONGRESS TO PASS NEW BILL TO HELP STUDENT-BORROWERS
Education Non-profits Urge Members of Congress to Pass the Student Loan Literacy Act of 2022 to Fund Student Loan Debt Counseling Services
August 16, 2022 | NEW YORK CITY, NEW YORK — Today, a group of 13 education non-profit organizations led by the Community Service Society (CSS) sent a letter to Members of Congress, calling on elected officials to support H.R. 8643 the Student Loan Literacy Act of 2022, introduced by Representatives Hakeem Jeffries (D-NY-08) and Jahana Hayes (D-CT-05) earlier this month. This bill would establish a federal funding stream for student loan consumer assistance programs (CAPs) that would provide the millions of Americans struggling with student loan debt the free and unbiased assistance they need to navigate the complex federal student lending system and be able to take advantage of the current repayment and debt forgiveness programs available.
Student loan debt has ballooned into a massive crisis in the U.S., with roughly 43 million Americans carrying some form of student debt, holding a total of $1.7 trillion in student loans across the nation. While student loan debt impacts Americans of all backgrounds and demographics, existing disparities between racial and socioeconomic groups of student loan borrowers have only been further exacerbated by the COVID-19 pandemic. For example, data shows that student loan debt disproportionately harms Black and Latinx families, women and low-income individuals, and at an increasing rate, older adults. Ultimately, the pandemic and related economic downturn have only increased demand for student loan debt counseling services, as many borrowers need help understanding existing relief and loan repayment options.
The Student Loan Literacy Act of 2022 would allocate $80 million in grant funding to states to pass down to community-based organizations and other direct service providers who engage with borrowers directly. States would also be able to use the funds to establish or expand existing CAPs. According to the letter of support, the funding would grant direct service providers with funds to address borrowers' needs, providing unbiased financial literacy support to everyday Americans. More specifically, CAPs would help borrowers determine their best repayment plan options, get out of default, access loan forgiveness, cancellation, and discharge program, resolve issues with student loan servicers and lenders, among other things.
If enacted, the legislation would run alongside and help pre-existing student loan debt relief measures, including the U.S. Department of Education’s Public Service Loan Forgiveness (PSLF) waiver and Income Driven Repayment (IDR) Forgiveness, providing support for borrowers to be able to navigate their options. The counseling services provided by the Student Loan Literacy Act would help borrowers make sense of these existing relief options, strengthening their value.
A copy of the letter of support can be found here: www.cssny.org/SLLA-letter
“Student loan debt is a crisis in our country. Among the reasons why is a complex loan repayment system that is difficult to navigate, a loan servicer sector that cannot be trusted to provide loan holders with accurate and reliable information, and a scarcity of independent resources for loan borrowers to access to help them effectively manage their debt,” said David R. Jones, President and CEO of the Community Service Society. “Legislation introduced today by Congressman Jeffries and Congresswoman Hayes is a game-changer for student loan debt borrowers. It means they will have a place to turn for free, unbiased, one-on-one counseling services with their student debt issues. We urge Congress to act on this legislation so that loan borrowers can access the tools and resources they need to get on a path to achieve economic stability.”
“Consumer Reports strongly supports this forward-looking legislation to provide federal funding for nonprofit Consumer Assistance Programs for student loan borrowers,” said Chuck Bell, Programs Director for Consumer Reports. “Similar to health care navigators, the Consumer Assistance Programs will help make sure student loan borrowers receive accurate and unbiased information about their loan repayment options and get help when they are facing delinquency and default. The Student Loan Literacy Act can help empower millions of borrowers to regain control of their financial future and take full advantage of programs that lower or eliminate payments such as Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF).”
“The student loan debt crisis in the United States has reached epidemic proportions,” said Frankie Miranda, President and CEO of Hispanic Federation. “Navigating student loan debt repayment is a daunting process and we know firsthand how this issue affects Latinos, and other racial and socioeconomic groups. Historically, we have faced mounting student loan debt and obstacles in achieving economic mobility that have worsened due to the devastation caused by the COVID-19 pandemic. It is crucial that Congress pass the Student Loan Literacy Act to support the creation of student loan consumer assistance programs across the country. This legislation introduced by Congressman Jefferies and Congresswoman Hayes will provide critical funds to community-based organizations to meet the increasing demand for financial education that will equip borrowers with the information and tools they need to understand their loan repayment options and opportunities for relief.”
“More than one million people in Virginia struggle with student loan debt, with nearly a 50 percent increase in older adults owing student debt and potentially carrying that debt well into retirement, putting them at greater risk of financial hardship,” said Jay Speer, Executive Director of the Virginia Poverty Law Center. “Many of the people that struggle with their student debt are daunted by the extraordinarily complex student loan system, don’t trust that their loan servicer has their financial interests in mind, and need help understanding their payment options and relief programs available to them. It makes economic sense to offer these borrowers independent, unbiased consumer assistance and counseling so that they can make informed decisions that lead to reducing or eliminating their debt, and putting themselves on a path to financial health. VPLC supports H.R. 8643, and we urge our congressional representatives to support this legislation.”
“Our federal student loan system has become so complicated that very few borrowers are able to successfully navigate it. We need to make sure that borrowers get the information and guidance they need to make informed decisions and tackle their debt,” said Carolina Rodriguez, Director of the Education Debt Consumer Assistance Program (EDCAP). “I cannot wait for the day that borrowers across the country can access free, accurate, and unbiased student loan help provided in their own communities and by trusted sources. The Student Loan Literacy Act will make that happen, and it will be a game changer!”
The legislation is critically needed as the level of demand for student loan counseling services continues to increase, particularly following the economic downturn caused by the COVID-19 pandemic. The signatories support this legislation which will:
- Help student loan debt borrowers navigate the federal student loan system and develop strategies that lead to future financial security.
- Provide dedicated federal funding to support community-based consumer assistance programs to help struggling borrowers, increase student loan servicer oversight, and inform policy decision making at both the state and federal level.
- Provide the much-needed unbiased one-on-one consumer assistance, educating consumers on their repayment options, developing an individualized long-term strategy based on debt size and earnings potential of the borrower, helping consumers apply for loan forgiveness, cancelation and discharge programs, and other services.
###
The Community Service Society of New York (CSS) has worked with and for New Yorkers since 1843 to promote economic opportunity and champion an equitable city and state. We power change through a strategic combination of research, services, and advocacy to make New York more livable for people facing economic insecurity. By expanding access to health care, affordable housing, employment, opportunities for individuals with conviction histories, debt assistance, and more, we make a tangible difference in the lives of millions. Join us at www.cssny.org.
Founded in 1936, Consumer Reports (CR) is an independent, nonprofit and nonpartisan organization that works with consumers to create a fair and just marketplace. Known for its rigorous testing and ratings of products, CR advocates for laws and company practices that put consumers first. CR is dedicated to amplifying the voices of consumers to promote safety, digital rights, financial fairness, and sustainability. The organization surveys millions of Americans every year, reports extensively on the challenges and opportunities for today’s consumers, and provides ad-free content and tools to 6 million members across the U.S.
Hispanic Federation (HF) is the nation’s premier Latino nonprofit membership organization. Founded in 1990, HF seeks to empower and advance the Hispanic community, support Hispanic families, and strengthen Latino institutions through work in the areas of education, health, immigration, civic engagement, economic empowerment, & the environment.
Virginia Poverty Law Center uses advocacy, education, and litigation to break down systemic barriers that keep low-income Virginians in the cycle of poverty.