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March 8, 2022

Courtney, other lawmakers, push for 0% interest rates on student loans

By Sten Spinella s.spinella@theday.com

U.S. Rep. Joe Courtney, D-2nd District, is trying to convince the president to extend the student loan payment pause implemented during the COVID-19 pandemic.

Courtney and Rep. Eric Swalwell, D-Calif., “are leading an effort in Congress to eliminate all interest charges on existing federal student loans,” according to Courtney’s office. During a news conference Wednesday, the two urged President Joe Biden to extend the pause in student loan payments and, along with 27 other House Democrats, they are sending a letter to the Biden administration requesting a 0% interest rate.

Courtney said borrowers are not prepared for the pause to end. “Though the pandemic has receded for now, we’re still not at the end of the national public health emergency,” he said Wednesday. “Our request to the president was, it’s still premature to move forward and allow that existing status quo to kick back in.”

The pause on paying student loans currently is set to end on May 1.

According to the U.S. Department of Education, keeping the interest rate at 0% would save borrowers on average $576 annually.

Both representatives said they felt the 0% interest rate should extend beyond the pandemic and they will be pushing for that policy.

In addition to the congressmen, a number of people offered firsthand accounts of their education and student loan borrowing experience in the U.S. They said outstanding student loans have caused issues in obtaining unrelated loans, how much they appreciate the pandemic pause on loan payments and described how student loan debt has made it difficult to save money. They also said that even if the president doesn’t actually cancel any student loan debt, reducing the interest rate to 0% would be helpful, and their credit scores in general and interest rates on unrelated loans already have improved during the pause.

Swalwell said this sort of 0% interest measure “has been a crusade” for Courtney in the past. He noted that, “This is something that does not need a bill to be signed into law, the president can do this on his own.”

“The interest rate is set by the administration, so we believe it can be brought down to zero,” Swalwell added. “Congress doesn’t vote every time an interest rate moves.”

Biden’s administration has canceled $15 billion in student loans since his term began through public service loan forgiveness, total and permanent disability loans and other specific types of loan forgiveness.

Courtney has long been a proponent of broadening public service loan forgiveness. Last year, the U.S. Department of Education adopted policy changes pushed by Courtney in a previous bill, which sought to correct U.S. Department of Education practices involving applications by active-duty military service members for loan forgiveness. The rules that had been in place have prevented a number of active-duty service members who have deployed far away from their families from applying their full period of service toward forgiveness, meaning they have to tack on time to their service in order to qualify.

Read more: https://www.theday.com/local-news/20220309/courtney-other-lawmakers-push-for-0-interest-rates-on-student-loans/