Press Releases

Rep. Horn Announces Endorsements for Student Loan Default Reduction Program Act

Washington, DC, November 13, 2019
Tags: Education

On Wednesday, Congresswoman Kendra Horn (OK-5) announced three national endorsements for the Student Loan Default Reduction Program Act, legislation she introduced in October to help tackle the issue of student debt. This bill will remove all adverse credit history related to federal student loans from a borrower’s credit once they complete default rehabilitation. Organizations endorsing Congresswoman Horn’s bill include the Project on Predatory Student Lending, the Institute for College Access and Success (TICAS), and the National Consumer Law Center (NCLC).

“Everyone deserves a second chance. When people do the work and go through the rehabilitation process, they shouldn’t be weighed down by negative reports on their credit,” said Congresswoman Horn. “The support of these organizations further demonstrates that the Student Loan Default Program Reduction Act is the right thing to do for our students, our colleges, our economy, and for Oklahoma’s 5th District. The Student Loan Default Reduction Program Act is one piece of the puzzle to address our national student loan debt crisis, and today’s endorsements take us another step forward for this critical legislation.” 

“Every day we hear from students who have been cheated by for-profit colleges and then suffer greatly from negative credit reporting, impacting their ability to rent an apartment, lease a car, or even get a job,” said Toby Merrill, Director of the Project on Predatory Student Lending. “We commend Rep. Horn for understanding the importance of removing negative credit reporting from borrowers who have been able to find a way out of default, particularly in the cases we see when the loan should never have been made in the first place, so that these students and their families can move on with their lives.”

“We are grateful to Rep. Horn for introducing the Student Loan Default Reduction Program Act to ensure that student loan borrowers who rehabilitate a defaulted loan are able to move forward with their financial lives,” said TICAS External Affairs & Policy Analyst Michele Streeter.

"Defaulted student loan borrowers are struggling. Draconian collection and default policies prevent borrowers from getting a fresh start by damaging their credit histories, increasing the cost of access to further credit, and potentially erecting barriers to accessing employment and housing. We applaud Congresswoman Horn's leadership to help struggling borrowers get back on their feet," said Persis Yu, National Consumer Law Center Attorney and Director of NCLC's Student Loan Borrower Assistance Project.

More than 45 million Americans have student loan debt totaling to 1.6 trillion dollars. More than 60 percent of Oklahoma students take out student loans and on average owe almost $26,000.

Over the past three decades, the average cost of tuition at four-year public colleges and universities in America has more than doubled. High interest rates often result in tens of thousands of dollars in additional costs.

Congresswoman Horn is committed to practical solutions to address our student loan debt crisis. This is another practical solution that rewards borrowers for doing the work to get back on track. Earlier this year, Congresswoman Horn introduced four bills to tackle higher education affordability:

  • The GRACE Act (Guaranteeing Respite After College Ends Act) - H.R. 3792. The Grace Act prevents interest from starting on student loans until six months after graduation or when a student leaves school. Starting the clock after students graduate or leave school would save tens of thousands for borrowers whose interest would have started immediately.
  • The SLASH Act (Student Loan Accrual Support and Help Act) - H.R. 3793. Student loan companies can currently charge more than 10% interest on many loans. This bill “slashes” interest rates by tying them to a low interest treasury rate, limits rate growth over time, and caps interest rates at 5%.
  • The Better Service to Borrowers Act of 2019 – H.R. 3519 simplifies loan documents so people understand what they are borrowing, how much it will cost, and their options to pay back the loan.
  • The Public Service Pays Off Act – HR 4113 encourages public service by providing incremental loan forgiveness instead of requiring ten years of payments before individuals are eligible for the program. More than 40,000 people have applied for Public Service Loan Forgiveness, but only 206 people have had loans forgiven.

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