Student loans: Democrats urge Biden to extend payment pause and cancel debt in new letter

Prominent Democrats are again urging the Biden administration to extend the pandemic-era student loan payment pause beyond May 1 and cancel debt for millions of borrowers, according to a letter sent on Thursday morning.

"We are writing to urge you to act now to extend the pause on federally-held student loan payments until at least the end of the year and to provide meaningful student debt cancellation," the letter signed by Sens. Chuck Schumer (D-NY), Elizabeth Warren (D-MA), and Raphael Warnock (D-GA) and Reps. Ayanna Pressley (D-MA), Ilhan Omar (D-MN), Pramila Jayapal (D-WA) and Jim Clyburn (D-SC) stated. Another 87 lawmakers added their names to the letter.

Student loan payments and interest on federally-held debt have been suspended since March 2020, meaning that an estimated 37 million borrowers did not have to pay on their loans. The New York Fed recently found that the payment pause has led to "an estimated $195 billion worth of waived payments through April 2022." Another roughly 10 million borrowers who hold private or Family Federal Education Loan (FFEL) loans owned by commercial banks did not benefit from the payment pause.

"The payment pause has been a significant federal investment throughout the pandemic, providing essential relief to millions of families during the economic and public health crisis and saving them an average of $393 per month," the letter asserted, later adding that most borrowers "are not financially prepared to shoulder another bill as they face skyrocketing costs for necessities like food and gas."

White House Chief of Staff Ron Klain recently said that President Biden "is going to look at what we should do on student debt before the pause expires, or he’ll extend the pause." The letter noted that Klain's comments "about potentially extending the payment pause and administratively canceling student loan debt are encouraging to millions of borrowers across the country."

Biden backed broad student loan forgiveness of $10,000 on the campaign trail in 2020 amid more generous proposals from then-rivals Sen. Bernie Sanders (D-VT) and Warren. An erasure of $10,000 for all borrowers with federally-backed loans would cost roughly $371 billion and erase the loans of about a third of borrowers.

During the current administration, Democrats have repeatedly urged a seemingly skeptical President Biden to enact broad-based cancellation of up to $50,000 via executive action (as opposed to legislation passed by Congress). The letter echoed Warren's previously stated argument that student loan forgiveness would boost the economy.

"Canceling a meaningful amount of student debt will provide long-term benefits to individuals and the economy, helping families buy their first homes, open a small business, or invest in their retirement," the letter stated.


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