Dozens of Democrats on Capitol Hill are calling on President Biden to extend the federal student loan payment moratorium by at least six months as the U.S. economy continues to heal from the coronavirus pandemic.
In a Wednesday letter addressed to Biden, 64 lawmakers urged him to take action before the Sept. 30 deadline when the loan forbearance period officially ends. The coalition of Democrats requested that Biden extend the pause until March 31, 2022, or until the economy returns to its pre-crisis levels – whichever is longer.
The effort was spearheaded by Senate Majority Leader Chuck Schumer and Sen. Elizabeth Warren, D-Mass., along with Reps. Ayanna Pressley, D-Mass., and Joe Courtney, D-Conn.
"The suspension of payments and interest during the pandemic has provided essential relief to borrowers and their families during this economic and public health crisis," the letter said. "Restarting payments, however, will present a significant challenge for borrowers, loan servicers, and the Department of Education, and we urge you not to let the payment pause lapse when borrowers are still depending on this financial relief."
The Education Department has provided about $72 billion in relief on student loan interest alone, the lawmakers said. About 41 million Americans are benefitting from the federal government’s pause of student loan payments, which began in March 2020 and was twice extended.
But the moratorium is poised to end in September, just as other pandemic relief programs – including the extra $300 a week in unemployment benefits and an eviction moratorium – expire.
"A wave of student loan defaults would cause long-term damage to borrowers’ credit and financial stability and could put a sudden and unnecessary drag on the recovering economy," they wrote.
Biden campaigned on canceling billions of dollars in student loan debt but has so far erased just a fraction of the pledged amount for a narrow number of borrowers, drawing ire from some progressive lawmakers who want him to move further left on the issue.
Schumer and Warren are among the lawmakers who have advocated for Biden to cancel $50,000 in outstanding federal debt per borrower via executive order.
The Democrats have maintained that Biden could use existing executive authority under the Higher Education Act to order the Department of Education to "modify, compromise, waive or release" student loans.
"Canceling student loan debt is the single most effective executive action that President Biden can take to kickstart this economy," Warren has said.
Such sweeping executive action by Biden would almost certainly face a legal challenge, and it's unclear whether it could survive. Critics have argued that using such power exceeds the president's authority granted by Congress.
Outstanding student loan debt has doubled over the past decade, nearing a staggering $1.7 trillion. About one in six American adults owes money on federal student loan debt, which is the largest amount of non-mortgage debt in the U.S.
It has been cited as a major hindrance in people’s "economic life" by Federal Reserve Chairman Jerome Powell.