Dozens of Capitol Hill Democrats are calling on President Biden to extend the federal moratorium on student loan payments by at least six months as the U.S. economy continues to recover from the coronavirus pandemic.
In a wednesday letter Addressed to Biden, 64 lawmakers urged him to take action before the September 30 deadline, when the forbearance period officially ends. The Democratic coalition has asked Biden to extend the hiatus until March 31, 2022, or until the economy returns to pre-crisis levels – whichever is longer.
The effort was led by Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren, D-Mass., Along with Representatives Ayanna Pressley, D-Mass., And Joe Courtney, D-Conn.
CANCELLATION OF STUDENT LOAN DEBT WOULD NOT BE EFFECTIVE IN BOOSTING THE ECONOMY, STUDY SHOWS
“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. âHowever, restarting payments will present a significant challenge for borrowers, lending services and the Department of Education, and we urge you not to let the payment break expire when borrowers are still dependent on this financial relief. “
The Education Department provided about $ 72 billion in relief on student loan interest alone, lawmakers said. About 41 million Americans are benefiting from the break in federal student loan payments, which began in March 2020 and has been extended twice.
But the moratorium is set to end in September, just as other pandemic relief programs – including the additional $ 300 per week in unemployment benefits and a moratorium on evictions – expire.
“A wave of student loan defaults would cause long-term damage to the credit and financial stability of borrowers and could put a sudden and unnecessary drag on economic recovery,” they wrote.
STUDENT LOAN DEBT CANCELLATION COULD BENEFIT MOST AMERICANS PURCHASED
Biden has campaigned to write off billions of dollars in student loan debt, but has so far only wiped out a fraction of the amount pledged for a small number of borrowers, angering some progressive lawmakers who want it to be. ‘he goes further on the question.
Schumer and Warren are among lawmakers who have argued for Biden to write off $ 50,000 of unpaid federal debt by borrower by executive order.
Democrats maintained that Biden could use existing executive power under the Higher Education Act to order the Education Department to âmodify, compromise, waive or releaseâ student loans.
âCanceling student loan debt is the most effective executive step President Biden can take to revive this economy,â Warren said.
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Such drastic executive action by Biden would almost certainly face a legal challenge, and it is not clear whether she could survive. Critics have argued that the use of such power goes beyond the president’s authority granted by Congress.
Student loan stocks have doubled over the past decade, reaching nearly $ 1.7 trillion. About one in six American adults owe money on federal student loan debt, which is the largest non-mortgage debt in the United States
It has been cited as a major obstacle to the âeconomic lifeâ of the people by Federal Reserve Chairman Jerome Powell.