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PAYMENT PAUSE FOR STUDENT LOANS SHOULD BE EXTENDED
The SPEAKER pro tempore. The Chair recognizes the gentleman from Connecticut (Mr. Courtney) for 5 minutes.
Mr. COURTNEY. Madam Speaker, last January, in one of his first executive orders, President Biden extended the student loan pause on monthly payments through the end of September.
This order allowed all direct student loans issued by the Federal Government through the U.S. Department of Education, again, to have a grace period during the recession that we are still experiencing. Even with a good job growth last month, 800,000 jobs added to the economy, a 5.6 percent unemployment rate, and having people starting to again recover, the need for that pause was blindingly obvious.
A couple weeks ago, myself and Congresswoman Ayanna Pressley wrote to President Biden and the Secretary of Education calling on the President to extend that pause again. We are about 60 days away from all these student loans snapping back with very high interest rates, and again, at a time when the economy is still recovering.
Madam Speaker, this is exactly what the Small Business Administration did for disaster loans issued during COVID when they extended the grace period allowed of 1 year, when those loans were issued during COVID, to have that grace period extended into 2022. That was a smart, wise move recognizing that this is the wrong time to add debt burden on individuals and businesses as the U.S. economy starts to recover.
Again, we understand that at some point we are going to have to have a return to student loan debt payments, but, again, there are additional reasons why this pause makes sense.
Two of the largest debt servicers, the Pennsylvania Higher Education Assistance Agency, which services a large number of student loan debts, announced a couple of weeks ago they are withdrawing from the program, which means that borrowers are going to be shifted to new servicers, as well as the New Hampshire Higher Education Loan Corporation.
So again, the dislocation and the change that is happening with student loan servicers are additional reasons why the President and Secretary Cardona should agree to our request.
Moving forward, it is time for Congress to act to fix some of the problems within the student loan space.
Congressman Dusty Johnson and I, on a bipartisan basis, back in January, introduced the Recognizing Military Service in the Public Service Loan Forgiveness Act. A companion bill in the Senate was introduced by Senator Rubio and Senator Hassan.
Again, the Public Service Loan Forgiveness Program was created back in 2007 basically to allow teachers, nurses, people serving in the military, cops--who will, again, make 10 years of payments on their student loans while holding down public service jobs--to be eligible for discharge of their student loan debt.
The last administration butchered this program. People who, again, for 10 years abided by the rules were refused and denied student loan discharge, including people serving in the military.
Our bill will untangle that bottleneck, will recognize that people who are on Active Duty overseas, away from their families, who again, were allowed a grace period in terms of monthly payments, those months will be credited towards public service loan forgiveness. It has been endorsed by every veteran service organization from VFW to the Iraq and Afghan War Veterans, and again, is a smart bipartisan bill which will help a population of people who perform the highest form of public service; namely, wearing the uniform of this country.
We should also, as Congress, change the law to allow people to refinance down the interest rate on their student loan debt. When these loans snap back, we are looking at 6 percent, 7 percent, 8 percent interest on legacy student loan debt.
The rest of the economy with a zero percent benchmark at the Federal Reserve is refinancing debt on homes, on consumer loans, on auto debt, but student loan borrowers are trapped unless Congress acts.
H.R. 3024 allows the Department of Education to refinance down the interest rates on student loan debt so that people, again, in a very low-interest rate environment--and the chairman of the Federal Reserve announced the other day he is going to keep the benchmark at zero through 2021. Student loan borrowers should get the benefit of those low interest rates just like every other middle class family that refinances their home or their consumer debt.
So, extend the pause. Let's fix the problems in the meantime. Congress can act.
The millennials, the young people of this country deserve our help, both to act with the tools that we have, and also, calling on the administration to provide an additional grace period just like we did for small businesses.
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SOURCE: Congressional Record Vol. 167, No. 128
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