December 21, 2021 | WASHINGTON, DC — Earlier today, Politico reported that the Biden White House and the U.S. Department of Education are considering an extension of the pause on student loan payments, interest charges, and debt collection in response to new public health and economic data.
In the past month, the rapid spread of the Omicron variant has driven new COVID-19 cases to record levels as the dual threats of economic instability and historic inflation batter American families this holiday season. Yet, as recently as last weekend, senior Biden Administration officials had reaffirmed the administration’s intention to resume student loan payments for tens of millions of people, in spite of mounting evidence that such a decision would be catastrophic for borrowers and their families.
In response to today’s report that the Administration is considering a change of course, SBPC Policy Director and Managing Counsel Persis Yu issued the following statement:
“We are extremely encouraged to hear that President Biden is considering an extension of the federal student loan payment pause. Prior to the pandemic, federal student loans were crushing 43 million student loan borrowers, and the payment suspension has been vital to ensuring that those very borrowers can keep their head above water. This is especially true for the most economically vulnerable who have defaulted on their federal loans and risk having the government seize their wages, social security benefits, and Child Tax Credits.
As the news of the past few weeks demonstrates, restarting payments on February 1, will have disastrous effects on student loan borrowers and their families. With the rise in COVID-19 cases, the increase in the cost of consumer goods, and the failure of Congress to extend the child tax credit, people with student debt are counting on President Biden to help them feed their families and keep a roof over their heads this holiday season. We encourage the President to be flexible in his pandemic relief, and extend the federal student loan payment pause, while simultaneously, working to address the larger systemic problems of the student loan crisis with widespread student debt cancellation.”
Earlier this month, the Student Borrower Protection Center led a coalition of more than 200 labor, civil rights, consumer, student, veterans, disability, and professional organizations in urging President Biden to abandon its plans to restart student loan payments on February 1st.
Last week, a new poll demonstrated that seventy percent of voters, including a majority of Republicans, support pausing student loan repayments during the pandemic.
In December, the U.S. Bureau of Labor Statistics released new economic data indicating that the American economy is currently experiencing the highest level of inflation in nearly four decades. Prices rose 6.8 percent in November when compared to last year. For families across the country, this means that the cost of food, housing, and other basic necessities has spiked even as the threat of a resurgent COVID-19 pandemic looms. Read statement by SBPC Executive Director Mike Pierce.
On Monday, the Centers for Disease Control and Prevention reported that Omicron now accounts for nearly 75 percent of new COVID-19 cases, which are now surging across the country.
The Student Borrower Protection Center is a nonprofit organization focused on alleviating the burden of student debt for millions of Americans. The 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.