As part of coronavirus relief for student loan holders, Congress last month voted to suspend loan payments for six months.
Individuals do not have to make student loan payments until October 2020 and there will be no accrual of interest and penalties during that time.
“It provides instant relief to people who are making payments,” said Brian Backstrom, director of Education Policy Studies at the Rockefeller Institute of Government. “It doesn’t provide any relief at all to those people [who] because of financial struggles are missing payments. All this does is puts off, until October, the same difficult discussions we need to have now.”
To discuss how the current student debt crisis can be addressed during the pandemic and in the future, the Rockefeller Institute of Government published the brief, “Student Loan Debt Reform in the Virus’s Economic Wake.”
In the analysis, Backstrom laid out long-term student loan reform recommendations.
“One of the things that has gotten lost is sort of a deeper dive into finding out which students are genuinely the most burdened by student debt,” said Backstrom. “And once we start looking at that type of detail, we can really develop effective public policies that can provide loan debt burden relief to those people who need it the most.”
According to the analysis, half of the current student debt is held by those individuals who have graduate degrees, which on average equates to the highest-earning college graduates. Blanket loan forgiveness could “disproportionately” favor those borrowers who hold a higher income, according to the brief.
