Biden should forgo student loan interest if he doesn’t extend payment break, senators say
A group of Democratic senators are calling on President Biden to waive interest on federal student loans in response to the ongoing pandemic.
Student Loan Payment Suspension and Interest Freeze Expires Soon
As of March 2020, federal student loan repayments have been suspended and interest on government-held federal student loans has been waived. This relief, originally passed by Congress in response to the worsening pandemic and intended to last six months, has been repeatedly extended by former President Trump and President Biden.
President Biden’s latest extension of the student loan payment suspension and interest freeze is set to expire on Jan. 31, 2022. Department of Education officials called it a “final” extension of student loan relief. repeatedly, suggesting the inevitability of the recovery. reimbursement. The administration has maintained its position, even in the face of mounting pressure from student loan advocates and progressives in Congress, who argue that historically high inflation and the new, fast-spreading Omicron variant necessitate further expansion of the student loan relief. Biden administration officials previously indicated that economic and pandemic-related indicators would be factored into data-driven decision-making regarding further student loan relief.
Last week, White House press secretary Jen Psaki suggested the administration was moving forward with plans for borrowers to resume repayment. “A smooth transition to reimbursement is a high priority for the administration,” she said, without specifically stating whether or not the administration was seriously considering extending the payment pause or providing other relief to borrowers.
Senators: Biden should continue waiving interest on student loans
While comments from White House officials suggest a further extension of ongoing student loan relief may not be likely, the conversation has largely focused on student loan repayments, not on interest. Presumably, if the student loan payment pause is allowed to expire, so will the associated interest freeze.
But a group of Democratic senators, led by Sen. Raphael Warnock (D-GA), argues it doesn’t have to be. Last week, the group sent a letter to President Biden, urging him to specifically extend the federal suspension of interest on student loans, even if federal loans are allowed to resume repayment.
“We call on the administration to continue waiving interest on federal student loans” for the duration of the pandemic, they wrote. “While borrowers will soon start making payments again, many still face financial challenges as our country strives to build back better after the COVID19 pandemic. Accumulating interest on student loans can be a significant challenge for borrowers with the lowest incomes or heaviest student debt burdens,” including Black, Latino, and Indigenous communities. “Continuing to waive interest on student loans will provide borrowers with vital financial support at a time when students, borrowers and higher education institutions are still recovering from the economic and academic disruptions caused by the pandemic, including the rising costs.” The senators argue that President Biden can rely on the same emergency authority he previously used to extend the student loan payment pause.
The White House did not address the letter directly, but Psaki said detailed plans for resuming student loan payments would be released in the coming weeks.
Still, student loan advocates argue that extending interest relief alone would not go far enough. “Restarting student loan payments for millions of working families – during a pandemic and record inflation – could very well be the worst economic decision the Biden administration will make,” said Debt spokesperson Braxton Brewington. Collective, a syndicate of debtors and an advocacy group. for student borrowers.
Thirteen other senators signed the letter with Senator Warnock, including Sens. Sherrod Brown (D-OH), Cory Booker (D-NJ) and Tammy Duckworth (D-IL).
Further Reading on Student Loans
Interest on student loans: agreement reached to reduce certain uncontrollable balance increases
Big changes coming to student loan repayment in 2022
New Student Loan Income-Based Payment Plan Details: Some New Benefits, But Proponents Are Disappointed
Student Loan Forgiveness Changes: Who Qualifies and How to Apply Under Biden’s Relief Expansion