Over 200 Organizations Representing Millions of Students, Workers, People of Color, Veterans, People with Disabilities, and People of Faith Demand the Administration Act to Deliver Promised Debt Relief Before Ending Payment Pause
December 8, 2021 | WASHINGTON, D.C. — Today, more than 200 organizations called on President Biden to delay restarting federal student loan payments for tens of millions of borrowers in light of the new omicron variant hampering the economy, upcoming loan transfers affecting millions of borrowers, and new data showing that borrowers are not financially prepared to restart payments. Due to an executive action taken in August 2021, student loan payments, interest charges, and debt collection are currently suspended through the end of January. Advocates warn that resuming payments will throw borrowers back into a system plagued by breakdowns, corruption, and abuse, where people were often left paying debts they did not owe or should no longer be paying. In light of the current economic instability, a rush to repayment without meaningful action to address the student debt crisis will undermine promises by the President to fix the student loan system and build back better.
A copy of the letter to President Biden can be found here: https://protectborrowers.org/wp-content/uploads/2021/12/Student-Loan-Payment-Pause-December-Coaltion-Letter-to-Biden.pdf
No student loan borrower with a federally-held loan has been required to make a student loan payment since March 2020 when former President 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 taken in August 2020, December 2020, January 2021, and August 2021. However, these protections are set to expire with payments to resume for federal student loans on February 1, 2022.
There is a broad consensus among borrowers, advocates, industry, regulators, law enforcement officials, and policymakers that restarting student loan payments in February is a recipe for disaster in light of current economic uncertainty and absent significant structural reforms and real, immediate debt relief.
Before the pandemic struck, tens of millions of borrowers struggled to navigate a badly broken student loan system. America’s student debt crisis wreaked havoc on the financial lives of families across the country, despite payment relief and debt forgiveness programs that promised that these debts would never be a life-long burden. The Biden Administration must address these issues before borrowers are forced back into the broken student loan system.
Although the existing payment pause has been a critical lifeline to millions, additional millions of student loan borrowers have been excluded from all federal student loan debt relief programs enacted since the start of the COVID-19 pandemic. Lawmakers from both parties have introduced legislation to address the borrowers left out from the suspension, and advocates have called on the Biden Administration to take immediate executive action to extend protections for these borrowers.
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The Student Borrower Protection Center is a nonprofit organization focused on alleviating the burden of student debt for millions of Americans. SBPC engages in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance economic opportunity for the next generation of students.