Katie Lobosco, CNN
Key Democratic lawmakers are calling on President Joe Biden to prolong the pandemic-related epidemic. suspension of student loan payments another six months after October – or until the economy reaches pre-pandemic employment levels, whichever is longer.
Senate Majority Leader Chuck Schumer of New York and Senator Elizabeth Warren of Massachusetts have led a group of more than 60 other Democrats who have petitioned the president letter sent Wednesday to push back the restart date, warning that it could “seriously impede our economic recovery.”
For now, federal student loan borrowers will be required to resume payments on October 1 after an unprecedented 19-month suspension.
The freeze was originally enacted by Congress and then extended by the Trump and Biden administrations.
CNN has reached out to the White House for comment.
How much borrowers saved
Borrowers’ balances have been effectively frozen since March 2020. Interest stopped rising, saving the average borrower. about $ 2,000 for the first 12 months – and collections on overdue debt were postponed.
Biden previously suspended collection of overdue student loans made by private lenderspreviously excluded from protection.
The pause in interest payments alone brought relief of $ 72 billion.
The benefit is even more significant for those working in the public sector and may be eligible for loan forgiveness after 10 years. They get credit for those 10 years of mandatory payments as if they kept making them during the pandemic, as long as they still work full time for suitable employers.
Both the pause in payments and the waiver of interest are automatic, but only apply to federally held loans. This covers approximately 85% of all federal student loans, including what are known as direct federal loans and PLUS loans, that parents borrowed on behalf of their children. It does not include some federal loans that are guaranteed by the state, but do not formally belong to them. As a rule, they were paid before 2010.
Democrats insist on abolishing student loans
Since taking office, Biden has written off about $ 1.5 billion in debt to borrowers who cheated by their nonprofit colleges… The process of forgiveness for these borrowers has been around for years, but cancellations were put on hold during the Trump administration, led by then Education Secretary Betsy DeVos, who tried to change the rule.
But Biden’s actions are not enough for some of his fellow Democrats, including Sumer and Warren, who urged him to cancel $ 50,000 student debt to the borrower.
Biden, who announced during the presidential campaign that he would support the abolition of $ 10,000 on a borrower, has repeatedly resisted pressure since taking office, arguing that the government should not forgive debts to people who went to Harvard, Yale, and Penn.
At this point, he has sent his education secretary, Miguel Cardona, to write a note on law enforcement agencies of the executive power on debt cancellation. It would be an unprecedented step, but memo lawyers at the Harvard Legal Services Center and its Predator Student Lending Project say the Department of Education has the authority to do so.
Biden did not include a student debt cancellation clause in his proposed $ 1.8 trillion American family plan, which calls for free community colleges and expand Pell grants for low-income students.
CNN’s Keith Sullivan contributed to this report.