National Consumer Law Center says plan will be "transformational" for millions of Americans
Following President Biden's announcement of student loan cancellation for between $10,000 and $20,000 (depending on a borrower's income and situation), the National Consumer Law Center (NCLC) applauded the move and said it would transform the lives of millions facing crushing student loan debt.
In a statement, the consumer advocacy group outlined the ways the Biden plan will benefit borrowers.
"The announcement of widespread debt cancellation with additional debt relief for those from low-income households promises transformational relief to tens of millions of low-income families and people of color who have borne the brunt of the nation’s student debt crisis and broken student loan system,” said Abby Shafroth, Director of the National Consumer Law Center's Student Loan Borrower Assistance Project. “For many borrowers, today’s action will mean they can finally be freed from their single largest financial liability and a relentless source of financial stress. It will allow them to imagine a future when they can build savings, a positive net worth, and a better life for themselves and their families instead of being perpetually indebted to the government.”
NCLC advocates also added that Biden's plan offers relief from a system that was flawed and often kept borrowers in debt for decades.
“For years, the student loan system has had numerous design flaws that led financially distressed borrowers to accrue excessive amounts of interest that has been capitalized over and over again, stopped borrowers from obtaining administrative relief, and resulted in many borrowers falling into default,” said Kyra Taylor, staff attorney at the National Consumer Law Center. “The people suffering most profoundly from these errors are the borrowers who were in default before the pandemic and experienced devastating collections, such as wage and social security benefit garnishment—actions that pushed many further below the poverty level. Over 5 million borrowers who were in default or over 90 days delinquent before the pandemic began are now eligible to have their loans fully canceled and can breathe a huge sigh of relief.”
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