Story at a glance

  • Under the CARES Act, both President Biden and then-President Trump extended the moratorium on student loan payments since it was first implemented in March 2020.
  • The moratorium is set to expire after Jan. 31, 2022, and millions of student loan repayments are set to resume.
  • On Wednesday, more than 200 student loan advocates wrote a letter to Biden arguing that the pause on loans should be extended again.

Throughout the coronavirus pandemic the federal government has allowed for millions of student loan payments to be paused, but in a few short months those repayments will resume. Now, more than 200 organizations are urging President Biden to extend the pause yet again.

Under the CARES Act, both President Biden and then-President Trump extended the student loan payment moratorium that halted federal student loan repayments while also automatically setting interest rates to zero. 

That moratorium is scheduled to expire after Jan. 31, 2022, effectively resuming student loan repayments for millions of Americans. However, a letter that was spearheaded by the Student Borrower Protection Center was sent to Biden on Wednesday, and it argued that the COVID-19 pandemic continues to devastate not only Americans’ health but their financial security.  

The letter cited the U.S. Department of Education’s own data saying, “borrowers are saving approximately $5 billion per month from the temporary 0 percent interest rate.”


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Advocates also reminded the president of his campaign promises to fix the “broken” student loan system and cancel federal student loan debt. They pointed out that the Education Department acknowledged it had a backlog of 175,000 applications for Public Service Loan Forgiveness and an additional backlog of more than 128,000 applications for Borrower Defense discharges. 

“There is a broad consensus among borrowers, advocates, industry, regulators, enforcement officials, and lawmakers that a rush to resume student loan payments is a recipe for disaster and will result in widespread confusion and distress for student loan borrowers,” the letter said. 

A survey by the Student Debt Crisis Center reiterated those concerns, finding that 89 percent of fully employed student loan borrowers said they were not financially secure enough to resume loan payments on Feb. 1, 2022. 

The American Civil Liberties Union (ACLU) was a co-signer on Wednesday’s letter and has been an outspoken critic of the U.S. student loan program. In June 2021, the group published a series of tweets that highlighted how the student debt crisis disproportionately hurts Black and Brown borrowers. 

“Two decades after starting school, Black borrowers on average still owed 95 percent of their debt, while white borrowers on average had paid off 95 percent of their student debt,” said the ACLU.

Members of Congress have also been calling on Biden to cancel federal student loan debt through executive action, saying it could be the single most effective executive action available to provide massive consumer-driven stimulus. 


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Published on Dec 08, 2021