Senator Elizabeth Warren of Massachusetts and other progressive Democrats in Congress are calling on President Biden to extend the current pause on federal officials. student loan payments and interest until March 2022.
“The pause in student loan payments was a huge relief for families, but it ends in 100 days,” Senator Warren said in a tweet on Wednesday. “We urge President Biden to extend it for at least another 6 months to give [the U.S. Department of Education] more time to prepare, and borrowers and our economy have more time to recover. “
Warren, along with Senate Majority Leader Chuck Schumer, New York, and representatives Ayanna Pressly of Massachusetts and Joe Courtney of Connecticut, wrote a letter to President Biden urging him to extend the moratorium. NBC News… “Resuming payments … will be a major problem for borrowers, lending institutions and the Ministry of Education, and we urge you not to allow payments to be suspended when borrowers are still dependent on this financial assistance,” officials wrote. They argued that Biden should extend the moratorium until March 31, 2022, or later, depending on the state of the economy.
The CARES Act, passed by Congress last March in response to the sharp escalation of the Covid-19 pandemic, temporarily suspended all payments to state federal student loans… The bill also froze interest and ended all efforts to collect debt on state federal student loans. The moratorium has been extended several times, most recently by President Biden on his first day in office. The current renewal expires on September 30, 2021, which means that millions of student loan borrowers will have to resume repayment in October.
Education Minister Miguel Cardona recently hinted that the September 30 deadline is not set in stone and could be extended further. “We are continuing to talk about whether this is the best time” for borrowers to resume payments, Cardona said at a Senate committee hearing earlier this month. However, he did not undertake any obligations and did not indicate a possible timeline for a future announcement.
Advocacy organizations for student loan borrowers are expressing growing concern about the ability of millions of student loan borrowers to suddenly resume payments on their loans in October, and whether student loan service providers will be able to service millions of borrowers’ accounts while simultaneously resuming repayment at any time. … at the same time, something that has never happened before.
“There is a broad consensus among borrowers, lawyers, industry, regulators, law enforcement officials and legislators on both sides that a hasty resumption of student loan payments is a recipe for disaster in the absence of significant structural reforms and real, immediate write-offs such as as a debt. cancellation for borrowers caught in this broken system, “wrote dozens of organizations in letter to President Biden in March. “The Biden administration now has the only opportunity in a generation to repair the damage done by decades of government mismanagement and industry abuse — an opportunity and commitment that must be met before any action is taken to resume monthly student loan payments. “
Advocates also continue to urge President Biden to make a broad decision to forgive student loans using executive action. “I believe that President Biden should #CancelStudentDebt to provide long-term assistance to working families and boost our economy, ”Senator Warren said in a follow-up tweet today. “But until then, extending the pause on student loans is a critical way to help tens of millions of borrowers crushed by debt.”
The Biden administration is conducting formal scrutiny to determine whether the president has legal authority to unilaterally cancel student loan debt through enforcement action. Results of this review may be released soon…