POLITICS

Democrats Press Administration To Continue Student Loan Payment Pause

The payments are set to resume at the end of September unless the White House acts.

More than 60 Congressional Democrats sent a letter to President Joe Biden on Wednesday asking him to continue a coronavirus-era pause on federal student loan payments for at least another six months.

The student loan payment pause is set to expire on Sept. 30. The Democrats who signed the letter, led by Massachusetts Sen. Elizabeth Warren and Senate Majority Leader Chuck Schumer of New York, are asking Biden to extend the pause until March 30, 2022, or until employment reaches pre-pandemic levels. 

“Borrowers have reaped significant benefits from the ongoing payment pause, taking the opportunity to pay down other debt, relieve financial pressures from lost jobs or decreased earnings, and support their families’ needs,” the members wrote.

“The scheduled resumption of student loan payments in October could create a significant drag on our economic recovery,” they added.

Sen. Elizabeth Warren (D-Mass.) and Senate Majority Leader Chuck Schumer (D-N.Y.) led the letter asking President Joe Biden t
Sen. Elizabeth Warren (D-Mass.) and Senate Majority Leader Chuck Schumer (D-N.Y.) led the letter asking President Joe Biden to continue a moratorium on federal student loan payments. 

The Education Department, which manages the federal government’s $1.4 trillion student loan portfolio, declined to comment on the letter. That portfolio, which covers debt held by more than 40 million borrowers, makes up the bulk of the student loan debt in the United States. 

While many of the 64 congressional Democrats who signed the letter are liberals who have long pushed for action on student loan forgiveness, several moderate Democrats — including Arizona Sen. Kyrsten Sinema and Connecticut Rep. Jim Himes — were also signatories. 

Reps. Ayanna Pressley (D-Mass.) and Joe Courtney (D-Conn.) were the lead authors of the letter among House Democrats. 

Former President Donald Trump started the moratorium not long after the pandemic hit, and Biden extended it until the end of September on his first day in office. Whether to extend the moratorium further is a crucial decision facing Biden, Education Secretary Miguel Cardona and Federal Student Aid COO Richard Cordray. 

Advocates for reforming the student loan and forgiving large amounts of student debt en masse applauded the May appointment of Cordray, an ally of Warren who led the Consumer Financial Protection Bureau during the presidency of Barack Obama. 

Warren has been continuing to push the Biden administration on the student loan crisis; she and Schumer have pushed for up to $50,000 forgiven per borrower.

She also recently placed a hold on the nomination of James Kvaal, Biden’s pick for the third-highest ranking job at the Department of Education in hopes of forcing reforms to how the department manages student loans. (Politico first reported Warren’s move.)

A spokesperson for the Department of Education downplayed the dispute.

“We’ve been working with Senate offices and are encouraged by the conversations and developments around James Kvaal’s nomination,” the agency said. “We share the same goals around making the Federal Student Aid office more consumer friendly and an advocate for student borrowers, which is why we’ve taken multiple actions to achieve this goal, including providing nearly $3 billion in targeted loan relief and bringing on Richard Cordray as Chief Operating Officer.”

The Department of Education and the White House are continuing to review whether Biden has the legal power to unilaterally forgive student loan debt, and whether doing so would be good policy. The president has been publicly dismissive of widespread debt forgiveness.