Schumer, Warren and Pressley urge Biden to extend student loan payment hiatus – and write off student debt
A group of leading Senate and House Democrats are calling on President Joe Biden to extend the student loan payment hiatus – and to write off some student debt.
Senate Majority Leader Chuck Schumer, Senator Elizabeth Warren, Democrat of Massachusetts, and Representative Ayanna Pressley, also Democrat of Massachusetts, said on Tuesday that a failure to extend the break on payments and collections from student loans – which expire Sept. 30 – could slow the economic recovery.
“COVID has created serious hardship for some and has caused many to lose their pace,” Schumer told reporters at a press conference. “Forcing borrowers to repay their debts now would be unfair, would be harsh, and in many cases would be cruel. ”
The press conference comes about a month after the group of lawmakers written to Biden asking him to extend the break at least until March 31, 2022.
Warren and Schumer have also held news events since at least last fall, calling on the president to write off up to $ 50,000 in student debt – a call they repeated on Tuesday.
The fast approaching deadline for resuming payments has increased the urgency of both of these demands, lawmakers said. In recent months, pressure from advocates has increased to extend the payment freeze. They worry that the student loan system and student loan services are not ready to handle the rush of calls from borrowers who may have questions or want to adjust their monthly bills as payments resume.
This can create administrative and financial headaches for borrowers. The pandemic marks the first time the government has shut down the entire student loan system, but in the past when borrowers resumed student loan payments after a more targeted freeze – for example, due to a disaster natural, – new spiked defaults.
It’s a sign borrowers weren’t aware payments had resumed or struggled to fit into an affordable repayment schedule on time – a scenario advocates fear could be repeated on a much larger scale.
Major changes are brewing
Adding fuel to advocates’ concerns: Major changes coming to the student loan system unrelated to the COVID payment hiatus. Earlier this month, the Pennsylvania Higher Education Assistance Agency, one of the top three organizations offering federal student loans, announced that it would not seek a new contract, after the expiration. of his current contract on December 14 of this year.
Another smaller student loan manager tied to the New Hampshire Higher Education Association Foundation also announced this month he wouldn’t be looking to renew his contract, which expires at the end of the year.
““Millions of Americans are now asking you to grab a pen and write off student loan debt.”“
The transition of the millions of new borrowers working with these services to new organizations is an operationally complex challenge that the Department of Education and Student Loan Services will plan for around the same time that payments are expected to resume.
Ministry of Education officials urged the White House extend the payment freeze until January 2022, Politico reported earlier this month.
Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group representing repairers, said the ministry has started discussing options for resuming payments with repairers, although the agency still has decisions to make regarding awareness of borrowers and other factors. .
“Although there are no definitive guidelines yet on any of the mechanisms, it is at least a positive sign to know that after several months the department seems to be reflecting and discussing the ongoing issues,” he said. Buchanan wrote in an email.
The Education Department and the White House did not immediately comment.
Even if the agency is able to ease the logistical challenges of resuming payments, advocates say the government shouldn’t ask borrowers to pay their student loan bills until the Biden administration resolves some of the problems plaguing the student loan system.
The administration has taken steps in this direction. So far, the Department of Education has written off over $ 1.5 billion in debt held by scammed students. The agency is also in the process of solicit feedback on the overhaul of the civil service loan forgiveness program.
Officials have struggled to access relief under the program, which allows people working in nonprofits or the government to have their federal student loans canceled after 120 months of payments.
Lawyers and lawmakers have called on the White House to go further, including canceling some student debt.
“We’re here today to say tick, tick, Mr. Chairman,” Warren said. “Millions of Americans are now asking you to grab a pen and write off student loan debt, grab a pen and extend the payment break, grab a pen and improve their lives.”