Padilla Calls On Biden To Extend Pause On Student Loan Payments
WASHINGTON, D.C. – U.S. Senator Alex Padilla (D-Calif.) joined Senate Majority Leader Chuck Schumer (D-N.Y.), Senator Elizabeth Warren (D-Mass.), Representative Ayanna Pressley (D-Mass.), and Representative Joe Courtney (D-Conn.) in sending a bicameral letter to President Biden calling on him to extend the pause on federal student loan payments until at least March 31, 2022. In California, student loan debt prevents 3.5 million borrowers from fully contributing to our economy.
During the coronavirus pandemic, executive actions by former Education Department (ED) Secretary Betsy DeVos and the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act paused payments for millions of borrowers. Recognizing the significant burden that student debt places on borrowers during an economic crisis, President Biden extended this pause through September 30, 2021 for the 87% of borrowers with direct federal loans. During this pause, ED has provided approximately $72 billion in relief on student loan interest alone – money that has been reinvested into the economy. Borrowers have reported being able to pay down other debt, relieve financial pressures from lost jobs or decreased earnings, and support their families.
Student loan payments are currently scheduled to resume on October 1, 2021. This could create an unnecessary drag on the economic recovery, especially with unemployment benefits also set to expire in September. Following past emergency suspensions of student loans during natural disasters, increased numbers of borrowers became delinquent or defaulted on their loans.
“The scheduled resumption of student loan payments in October could create a significant drag on our economic recovery. Before the pandemic, the average student loan payment was between $200 and $299 per month – a substantial part of a household budget, and money that is desperately needed for basic needs,” the lawmakers wrote.
Extending the pause on payments would provide ongoing relief for student loan borrowers, who are disproportionately women and people of color, the same groups that have been more adversely affected by the pandemic. It would also give the Department of Education more time to prepare for payments to resume.
“We urge you to act quickly to extend the current pause on payments and interest so that borrowers are not penalized and student debt payments do not drag down the pace of our economic recovery. Specifically, we ask that you extend the pause by at least six months—until March 31, 2022—or until the economy reaches pre-pandemic employment levels, whichever is longer,” the lawmakers concluded.
Text of the letter can be found HERE.