Pressure builds on Biden to extend the student loan suspension and cancel student debt – that’s where things are



As the 18-month pause in federal student loan payments draws near, the Biden administration is under pressure to extend and introduce widespread student loan pardons.

The CARES Act, which Congress passed in March 2020 in response to the pandemic, temporarily suspended all payments on government federal student loans, suspended interest payments, and halted all collection initiatives. The student loan freeze has been extended several times. The current extension expires on September 30, 2021, which means that millions of student loan borrowers will resume repayment in October.

Student loan borrower activists and advocates have expressed growing concern about the ability of millions of student loan borrowers to suddenly resume payments this fall, and whether student loan servicers will be able to process millions of borrower accounts while simultaneously renewing payments – an unprecedented situation. …

Diverse coalition of 125 national trade unions, consumer advocacy organizations and civil rights groups. sent a letter to President Biden this week, urging him to extend the moratorium and accept sweeping student debt cancellation.

“The pause in student loan repayments was one of the most important investments the federal government has made in American financial lives in a generation — recognizing that the shortcomings of the current student loan protection system cannot protect families in the face of the economic crisis. and the public health crisis, ”the organizations wrote. “There is a broad consensus among borrowers, lawyers, industry, regulators, law enforcement officials and legislators that a hasty resumption of student loan payments is a recipe for disaster and will lead to widespread confusion and disaster for student loan borrowers. Before resuming student loan payments, the Department of Education must implement significant structural reforms, provide real, immediate assistance, and write off a significant amount of federal student debt. This ensures that millions of borrowers are not trapped in a broken system when the economy starts to recover. For the reasons stated above, we strongly recommend that you take immediate action to extend the current pause in the payment of student loans. “

Elected officials are also intensifying the pressure campaign. “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. Warren and other progressive Democrats wrote a letter this week to President Biden, “urging 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 also urged Biden to write off his student debt.

Polls show that the vast majority of student loan borrowers support extending the moratorium. BUT interview Research on student debt and Savi found that 9 out of 10 student loan borrowers are not ready to resume payments on October 1, and almost two-thirds of respondents do not believe they will be ready to resume payments until September 2022 or later.

“Our [survey] proves that pandemic relief for student loan borrowers remains critical to the well-being of millions of families, ”said Natalia Abrams, executive director of Student Debt Crisis. “Even as the economic recovery is gaining momentum, many Americans are still suffering the economic damage caused by the pandemic. The overwhelming majority of respondents said they were not ready to resume their student loan payments in October, when the benefits expire. We urge the Biden administration to extend the pause on payments and interest on federal student loans to give Americans a chance to get back on their feet when the health crisis dies down and the economic recovery picks up.

Education Secretary Miguel Cardona admitted Pressure is mounting this week to extend the pause in student loans. But he did not undertake any obligations for further renewal. “We are aware of the impact of the pandemic on our borrowers. And we have already talked about the extension of the pause … We really plan to receive information for the transmission soon. Reboot right now, it’s September 30th. “

The Biden administration also has yet to announce the completion of an ongoing review to determine whether the president has the legal authority to unilaterally cancel student loan debt through executive action. Biden has expressed support in the past for the widespread forgiveness of student loans, but he was skeptical that this could be accepted using the executive branch.

Further reading

Elizabeth Warren – To Biden: Extend Student Loan Break To 2022 Or Later

Will Biden cancel student loan debt? We will soon find out

Biden Administration Cancels $ 500 Million Student Loan Debt – Key Facts

Biden student loan forgiveness review: should you take steps now to cancel your student debt later?


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