On Nov. 16, the ABA sent letters to House and Senate leaders urging Congress to include debt relief on federally held student loans in its next stimulus relief bill, pointing out that many of those with student loans are still struggling.
“The pandemic continues to create severe economic hardships for millions of Americans, including many in the legal profession who incurred substantial debt in pursuit of professional licensure,” the letters said.
Lawyers with student debt benefited from provisions included in the CARES Act, the economic stimulus bill signed into law in March. It suspended federal student loan repayments, postponed collections on defaulted loans and reduced interest rates to 0%. The CARES Act also ensured continuity for those pursuing federal Public Service Loan Forgiveness program benefits—a program that has helped local communities across the country to hire attorneys and others devoted to public service at lower salaries, often in rural communities where such services might not otherwise be available, in exchange for the promise of student loan debt relief. The debt-relief provisions in the CARES Act expired Sep. 30 but have been extended by the Trump Administration until Dec. 31.
House Democrats included student loan repayment relief in their $2.2 trillion HEROES Act 2.0 bill, passed in October. But whether student loan relief will ultimately be included in a final relief bill remains unclear. Republicans are insisting on a much smaller package than the one passed by Democrats.
As the pandemic has stretched on, the ABA has been active in advocating for student debt relief. At its 2020 Annual Meeting, the House of Delegates passed a resolution urging Congress to extend the CARES Act’s forbearance of federally held student loans. Earlier in the year, it launched a grassroots campaign to encourage new professionals and public servants to ask Congress to extend the debt relief provisions past the Sept. 30 expiration date.
According to the ABA Young Lawyers Division’s (ABA YLD) 2020 Law School Student Loan Debt Survey Report, of the participants surveyed, the average debt for law school graduates has skyrocketed to more than $150,000. The ABA YLD Report also revealed a notable difference in the debt loads of Black, Hispanic, Asian and Multiracial law school graduates compared with their White counterparts, with at least one-third of the former group having $200,000 or more in outstanding loans at graduation.
The ABA letters stressed that the severe economic downturn caused by the pandemic has made it even more difficult for many thousands of unemployed or under-employed recent graduates to pay these enormous debts. “The problem is particularly acute for those graduates who have been unable to sit for a bar exam through no fault of their own and unable to secure legal jobs so they can pay back their loans,” they said.
The ABA letters added that temporary suspension of student loan repayment is not equivalent to student loan forgiveness; these loans still must be repaid.
“Recent law school graduates, licensed attorneys who are unemployed or underemployed, and millions of other affected American borrowers with student loan debt – including teachers, nurses and other professionals – simply need more time and forbearance due to current economic conditions,” the letters stated. “They will remain responsible for paying their debts once the employment situation improves.”
Join us in urging Congress to include student loan debt relief in its next COVID relief bill here.