May 17, 2022
The Biden Administration is forging a plan that will be released in the coming weeks on how to address the student loan crisis and the $1.7 trillion in debt facing 43 million Americans. The National Association of Student Financial Aid Administrators and 21 other organizations have a good idea why the system has failed and have proposed their own set of solutions beyond simple loan forgiveness.
NASFAA and those groups have combined in a 42-page report that includes more than 30 recommendations they say can help provide a framework for policymakers to avoid repeating the same mistakes in years to come.
“As the president and Congress consider widespread debt forgiveness, we call attention to the noticeable absence and urgently needed policy reforms that will prevent borrowers from being in this same exact position in the future,” said NASFAA President and CEO Justin Draeger. “Fixing the loan program would be less expensive than forgiving $1.5 trillion in loan debt. We need a reset. And whether that reset does or doesn’t contain loan forgiveness, it’s beside the point. People need simplicity and predictability.”
From servicing to repayments to defaults, the coalition’s “holistic” plan aims to improve the student loan process, which has been confusing, chaotic and punitive for some borrowers. Though the Administration has helped victims of predatory institutions and a sputtering Public Service Loan Forgiveness program, they have been quick fixes. There are also no guarantees that any debt relief proposal pitched by the President—be it $10,000 or more—will get through Congress. Republican legislators are warning they will try to halt the cancellation of any debt or any extension of the grace period on student loan payments beyond Aug. 31. So a thoughtful, long-term solution involving a multitude of stakeholders is the best option, they say.