Loan payment

Suspension of student loan payments set to extend until 2023: Patty Murray

  • Senate Education Chair Patty Murray called on Biden to extend the student loan payment break through 2023.
  • She said borrowers cannot resume payments until the “broken” loan system is fixed.
  • Some of these suggested solutions included loan forgiveness and easier access to repayment plans.

A leading Democratic senator wants President Joe Biden to extend the pause on student loan payments until at least next year.

“When I talk to student borrowers in Washington state, one thing is painfully clear: the student loan system is broken,” said the chair of the Senate Health, Education, Labor and Labor Committee. of pensions, Patty Murray, in a press release. “It’s ruining lives and holding people back. Borrowers are grappling with rising costs, struggling to recover from public health and economic crises, and grappling with a student loan system down – and all of this is particularly felt by borrowers of color.”

That’s why she wants Biden to take the time to “fix” the system for good.

The pause on student loan payments, with interest waived, has been in effect for more than two years as part of pandemic relief measures from Biden and former President Donald Trump. Biden recently extended that hiatus for the third time, through May 1. With that date fast approaching, lawmakers like Murray fear most of the 43 million federal borrowers are financially ready to pay another monthly bill.

To ensure the student loan system works in the best interests of borrowers, Murray suggested four reforms Biden should implement:

  1. Give borrowers a fresh start by putting those who were in default in good standing on their credit reports;
  2. Facilitate access to income-tested repayment plans and cap monthly payments at no more than 10% of discretionary income;
  3. Extend the deadline for the Public Service Loan Forgiveness Waiver (PSLF) which allows prior ineligible payments to count towards loan forgiveness;
  4. And forgive some student debt for all borrowers “while prioritizing those who are having the most difficulty.”

At this time, it’s unclear what repayment timeline the Biden administration is considering. Two weeks ago, White House Chief of Staff Ron Klain suggested to Pod Save America that federal borrowers were on the verge of some form of relief ahead of the scheduled payment resumption date. May, the 1st.

“The president is going to look at what we should do on student debt before the pause expires, or he will extend the pause,” Klain said, adding that “the question of whether or not there is a the executive on canceling student debt when payments resume is a decision we will make before payments resume.”

More recently, the Department of Education hinted that another extension of the suspension of payments could be considered: it asked student loan companies to stop sending notices to borrowers about the resumption of payments, what a loan company would typically do before a payment resumption date.

What is clear to Murray is that payments cannot resume until Biden corrects “the failure of the student loan policy that has financial consequences.”

“This lending system is unacceptable and we can fix it,” she said. “When you get a loan to pay for college, you deserve a system that works. It should be easy to sign up for a reasonable repayment plan, no one should end up with a monthly payment they can’t afford. allow, and debt relief should’ It’s not too much to ask – so until we fix our student loan system, the student loan payment pause must continue to provide borrowers with relief whose they need it so much.