Loan

Dems Continue to Push Biden to Extend Pause On Repayments

90+ Democratic lawmakers have signed on to a letter to Joe Biden Thursday calling for an extension of the pause on government student loan repayments through the end of 2022.

Democrats in both the House of Representatives and also Senate authorized the letter, consisting of Senate Majority Leader Chuck Schumer of New York, House Majority Whip James Clyburn of South Carolina, Elizabeth Warren of Massachusetts as well as Pramila Jayapal of Washington. Members of the Democrat-Socialist”Squad” signed the letter too, including Representative Ayanna Pressley of Massachusetts as well as Ilhan Omar of Minnesota.

“Given the fast-approaching deadline for borrowers to resume payments, your administration must act as quickly as possible to extend the pause and make clear to the American public your intention to cancel a meaningful amount of student debt. We look forward to supporting your administration in getting it done,” the letter reads.

The present expansion will expire on May 1 after the moratorium on loan repayments was first presented in early 2020 by the Trump administration as a response to the Covid-19 panic. The time out keeps interest rates at 0 percent and puts a hold on debt-collection initiatives. The initiative was applicable to more than 36 million Americans that have student loans held by the federal government.

Biden issued the most recent extension of the postponement in December, amid issues concerning a rise in Covid-19 instances as the highly transmissible, but ultimately milder Omicron variation rose in the U.S.

“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” Biden said in a statement at the time.

Now, the lawmakers said “skyrocketing costs for necessities like food and gas” will pose an obstacle for repayment, saying “restarting repayment will financially destabilize many borrowers and their families, and will cause hardship for many who could not afford repayment.”

The cumulative financial obligation of the 36 million debtors adds up to over $1.37 trillion, Education Department data reveals. Roughly one-third of customers remain in default or delinquency. The typical monthly payment due is $400.

Education Secretary Miguel Cardona stated in December that maintaining the plan until May would permit settlement strategies receptive to the fiscal needs of students, such as an income-driven payment strategy.

Cardona said the time out“will provide critical relief to borrowers who continue to face financial hardships as a result of the pandemic, and will allow our administration to assess the impacts of omicron on student borrowers.”

When the administration expanded the pause from September 2021 to January 2021, officials pledged that it would certainly be the final expansion of the alleviation.

The group of Democratic legislators likewise contacted the president to “cancel student debt now,”  saying that cancellation is “one of the most powerful ways to address racial and economic equity issues.”

“The student loan system mirrors many of the inequalities that plague American society and widens the racial wealth gap. Black students in particular borrow more to attend college, borrow more often while they are in school, and have a harder time paying their debt off than their white peers,” they wrote.

“They are more than three times as likely to go into default within four years on their federal loans as white borrowers — and face wage garnishment, tax refund withholding, and federal benefit offsets,” the letter added. “While Latino borrowers often have lower loan balances than their white peers, they are more likely to struggle in repaying their loans, and have some of the lowest post-education earnings among all racial or ethnic groups.”

The White House stated last year it had asked Cardona to determine whether Biden has the authority to unilaterally cancel student debt across the board. Progressives have actually required Cardona’s memo to be openly released. Many conservatives find the concept of universal student debt “cancellation” repugnant, given that it would force successful American taxpayers, many of whom chose alternatives to college (eg. Trade schools, military service, on-the-job training, etc,.) to effectively foot the bill for college students who chose to pursue fields that failed to yield gainful employment.

H/T National Review

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