Democrats Urge Biden Administration To Extend Student Loan Freeze
Democrats are urging President Joe Biden to extend the freeze on federal student loan payments. Student loan payments and interest were first frozen in March 2020 due to the Covid-19 pandemic. However, officials at the Education Department have stated that student loan payments and interest will resume on Feb. 1, for the first time in nearly two years.
Many voices have urged the Biden administration to extend the freeze. If the plan moves forward, tens of millions of Americans will be expected to resume paying student loans with interest. According to the Roosevelt Institute, this would mean approximately 18 million families paying a total of $85 billion next year.
Critics warn that this could greatly harm the economy.
Politicians, consumer advocacy groups and unions have all warned against the consequences of reinstating the monthly payments. The Student Borrower Protection Center led a coalition of like-minded organizations in warning, in a letter to the White House, that “a rush to resume student loan payments is a recipe for disaster and will result in widespread confusion and distress for student loan borrowers.”
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Senate Majority Leader Chuck Schumer (D-New York), Sen. Elizabeth Warren (D-Massachusetts), and Rep. Ayanna Pressley (D-Massachusetts) said in a recent letter to Biden that reinstating the payments would “hurt individual families and the economy as a whole.”
The lawmakers argued that the threat of the coronavirus remains a concern, saying that the Omicron variant serves as “a reminder the virus is still impacting parts of the economy and public health.”
Rather than the government restart student loan payments in the midst of these pandemic pressures, the legislators urged the administration to wait. They suggested instead that the freeze should be extended at least “until the economy reaches pre-pandemic employment levels.”
On Friday, White House press secretary Jen Psaki said that the administration would continue to analyze the threat of the Omicron variant, but she did not think that this was a reason to extend the student loan freeze.
“We’re still assessing the impact of the Omicron variant,” Psaki said. “But a smooth transition back into repayment is a high priority for the administration.”
Last week, a dozen Senate Democrats, led by Sens. Raphael Warnock (D-Georgia) and Ron Wyden (D-Oregon) urged that even if loan payments do resume on Feb. 1, the interest rate should be kept at zero. The Education Department has estimated that an interest waiver could save borrowers about $5 billion per month.
Throughout the country, there have been increasing calls for the government to cancel student loan debt altogether. The White House has publicly stated that it continues to consider this question.
Currently, there exist programs to excuse student loan debt for specific groups, such as public service workers and people with severe disabilities. Since the beginning of the Biden administration, these programs have forgiven borrowers of approximately $12 billion.
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