Today, 176 organizations led by advocacy group Student Borrower Protection Center called on President Joe Biden to once again extend the pause on federal student loan payments for tens of millions of borrowers that is currently set to expire on August 31.
Advocates write in a letter that resuming payments will throw borrowers back into a system plagued by mismanagement, corruption, and abuse, and claim that polls continue to show borrowers are not financially prepared to restart payments. In the letter, the organizations also made a note of reminding President Biden that his administration has yet to deliver on a wide range of promises to address the student loan debt crisis.
“People with student debt cannot be required to make payments toward loans your administration has promised to cancel.”
June 30 Coalition letter to President Joe Biden
As President Biden considers a sweeping executive action to cancel a substantial amount of federal student loan debt for all borrowers, the organizations write: “People with student debt cannot be required to make payments toward loans your administration has promised to cancel.”
The Biden Administration has said that before September, the President will decide either to extend the pause again (likely through the end of 2022), or cancel some level of student loan debt.
A copy of the letter to President Biden can be found here.
The coalition, which includes the NAACP, the United Auto Workers and the Consumer Federation of America, says recent reports suggest that President Biden “may be considering a rushed restart of federal student loan payments as part of a misguided effort to combat inflation by taking money out of the pockets of people with student debt.” These reports come as the Biden Administration has acknowledged that it is weighing an historic effort to cancel student debt for tens of millions of people via executive action.
“We … strongly urge your administration not to collect money from people with student debt as a tactic to fight inflation,” the 176 organizations wrote to President Biden. “Instead our organizations urge you to enact robust student debt cancellation that is not means tested and does not require an opt-in for participation and to fully implement this policy before any student loan bill comes due.”
Since taking office, President Biden has already announced a range of new policies that, if fully implemented, would deliver debt relief to millions of borrowers. Any new action to broadly cancel student debt could expand this promise to tens of millions of additional borrowers.
“The pause on most federal student loan payments during the pandemic has provided much-needed breathing room for the AFT’s over 1.7 million educators, nurses and public employees, along with millions of other borrowers who feel pauperized by crushing student loan debt” said American Federation of Teachers President Randi Weingarten. “A hasty restart of payments now, in this time of rising costs, and while thousands are still waiting for their loan forgiveness applications to be processed, would be devastating. This is no time to shift the burden of a broken student loan system onto the backs of working people.”
“The federal payment pause is a temporary fix to a problem that requires a permanent solution,” said Jaylon Herbin, policy and outreach manager and student loan lead at the Center for Responsible Lending. “President Biden can and should use the authority of executive action to uphold the administration’s commitment to helping communities of color and women, who deserve the ability to build their American dream. The time is now to cancel $50,000 in student loan debt, reform our educational system and begin addressing the racial wealth gap.”
“From the COVID-19 pandemic to skyrocketing inflation, Americans with have faced one crisis after another. For millions of people, the pause on student loan payments is the only meaningful relief they have received in months,” said Cody Hounanian, executive director of Student Debt Crisis Center. “President Biden must extend the payment pause and cancel student debt before anyone has to make a payment again. Doing so will give Americans time to get back on their feet and an opportunity to thrive in months and years to come.”
No student loan borrower with a federally held loan has been required to make a student loan payment since March 2020 when former President Donald Trump signed the CARES Act, pausing student loan payments and suspending interest charges for tens of millions of student loan borrowers. This set of protections was extended via executive actions in August 2020, December 2020, January 2021, August 2021, December 2021 and April 2022. The pause is set to expire with payments to resume for federal student loans on August 31, 2022 unless Biden takes action again.
“Cancelling student debt can be transformational for tens of millions of people, but if President Biden leaves borrowers begging for relief at the moment their bills come due, his legacy will just be his attempt to break inflation on the backs of people struggling with historic levels of debt,” said Student Borrower Protection Center executive director Mike Pierce. “When President Biden decides to cancel student debt for everyone, borrowers need more than just another promise buried in the fine print at the bottom of a loan bill.”
SEE ALSO:
• Biden Extends Student Loan Repayment Pause to September
• Biden Student Loan Debt Decision Coming by September
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
“People with student debt cannot be required to make payments toward loans your administration has promised to cancel.”
This sounds like something BLM would state, or NAACP lawyers in front of some city courthouse with local news cameras rolling.