- 64 Democrats sent a letter to Biden urging him to extend the student loan payment pause by 6 months.
- Led by Elizabeth Warren and Chuck Schumer, they say borrowers are still recovering from the pandemic.
- Education Sec. Miguel Cardona has hinted at extending the pause but has not said so definitively.
- See more stories on Insider’s business page.
Borrowers with student loans haven’t had to pay them back through the pandemic, but that pause on payments is set to lift at the end of September. Although Education Secretary Miguel Cardona has hinted at a futher extension of the pause, no details have yet been released.
Sixty-four Democrats want to give borrowers certainty – and an additional six months, at least, free of student-loan payments.
Senate Majority Leader Chuck Schumer, Massachusetts Sen. Elizabeth Warren, Massachusetts Rep. Ayanna Pressley, and Connecticut Rep. Joe Courtney led 60 other Democratic colleagues in sending a letter to President Joe Biden on Wednesday, urging him to extend the student-loan payment pause until March 31, 2022, or until the economy returns to pre-pandemic employment levels, whichever is longer.
The Democrats wrote in the letter, obtained by Insider, that the pause on student-loan payments and interest have provided “essential relief” to borrowers during the pandemic.
“Borrowers have reaped significant benefits from the ongoing payment pause, taking the opportunity to pay down other debt, relieve financial pressures from lost jobs or decreased earnings, and support their families’ need,” the letter said.
But the lawmakers added that the “scheduled resumption of student loan payments in October could create a significant drag on our economic recovery.”
The letter noted that even as the economy is recovering from the pandemic, it is not reaching women and people of color equally. It cited research from Brandeis University that found the median Black borrower owes 95% of their debt twenty years after starting college, compared to only 6% for the median white borrower.
Insider reported last week that women can expect to earn a $35,000 salary right after graduation – not much more than the average female student-debt load, according to the American Association of University Women.
Warren was one of the Democrats that sent a letter to the CEOs of all student-loan servicers on Monday, requesting information on how they are best preparing borrowers to restart loan payments, warning of the “disastrous” consequences of dropping borrowers back into repayment without proper assistance.
Cardona said during a Senate hearing last week that he is continuing to have conversations on extending the payment pause past September, but the Education Department declined to provide further details on those conversations.
This letter is the latest of Democrats’ efforts to protect borrowers. Warren and Schumer are leading the effort to call on Biden to cancel $50,000 in student debt per borrower using his executive powers – that of which the Education and Justice Departments are currently reviewing.
The Democrats also acknowledged those reviews in their letter to Biden and urged their quick completion, but given the fast-approaching expiration of the payment pause, they want Biden to act on extending that first.
“President Biden can and must cancel student debt with the stroke of a pen. We urgently call on him to act,” Pressley said in a statement. “In the interim, extending this payment pause will provide a crucial additional layer of relief for millions of borrowers. We can’t turn our backs on these families as we work toward an equitable economic recovery.”