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Democrats press Biden for details on student loan plans before payments resume

A group of congressional Democrats sent a letter the Biden administration Thursday seeking details on how it plans to restart payments on May 1.
Image: Harvard University, College Students Told To Leave Campuses To Counter Spread Of Coronavirus
A student walks through Harvard Yard on the campus of Harvard University, in Cambridge, Mass., on March 12, 2020.Maddie Meyer / Getty Images file

WASHINGTON — Congressional Democrats are urging the Biden administration to provide more details on its plans to restart federal student loan payments while raising concerns of potential chaos if the two-year pause ends in May.

In a letter to administration officials, a group of lawmakers asked the Education Department to respond to a long list of questions that appear intended to demonstrate the government is unprepared to ensure borrowers are properly notified before payments resume on May 1.

The letter is the latest sign of growing pressure on President Joe Biden to issue another extension of the payments pause. Federal student loan payments have been frozen since March 2020.

“While we appreciate the Biden Administration’s actions to extend the payment pause amid the COVID-19 pandemic, we are concerned that with less than 70 days until the scheduled expiration, borrowers may lack clarity about the timelines associated with the resumptions of payments,” the lawmakers wrote.

The letter, led by Sen. Elizabeth Warren of Massachusetts and Reps. Lauren Underwood of Illinois and Colin Allred of Texas, was signed by Sens. Maggie Hassan of New Hampshire, Tammy Duckworth of Illinois, and Reps. Lucy McBath of Georgia, Dina Titus of Nevada and Bill Foster of Illinois.

While progressives have been pushing Biden for weeks to extend the payment pause and tackle more sweeping debt forgiveness, Thursday's letter included moderate members of the party who are facing difficult re-election bids, suggesting vulnerable Democrats might be feeling pressure to provide more financial relief to constituents amid the ongoing Covid pandemic and as inflation concerns grip the country heading into the midterm elections.

The president’s party usually loses congressional seats in midterm elections, and with such slim majorities in the House and Senate, Democrats have been bracing for a challenging November.

Some Democrats have argued that requiring student loan payments to resume in May could depress turnout of the Democratic base, especially as Biden has been unable to deliver on legislative priorities, such as his Build Back Better agenda and voting rights.

In the letter, lawmakers cited recent studies that show borrowers say they are not prepared to start making payments again in May, including a report from the Government Accountability Office that estimates roughly half of all federal student loan borrowers are at “increased risk of delinquency.”

Borrowers haven’t had to make payments since March 2020, when former President Donald Trump signed into law the CARES Act, which paused payments through September 2020 and froze interest accumulation for the roughly 42 million borrowers.

Trump later took executive action to extend the deferral period through January 2021. Biden, on his first day in office, signed an executive order continuing the pause through Sept. 30. He issued another extension in September, giving borrowers until Jan. 31 before they would have to resume making payments. In December, he again extended the pause through May 1.

The moratorium doesn’t apply to borrowers with privately held loans.

Although the White House hasn’t indicated whether Biden will issue another extension, many advocates feel encouraged by the fact that the administration hasn't ruled it out entirely, as was the case last fall, when the White House explicitly said it wouldn’t extend the pause beyond Jan. 31. Biden changed course after the omicron variant of the coronavirus hit.

Asked last month whether Biden was worried about the potential political cost of restarting student loan payments so close to the elections, White House press secretary Jen Psaki said the administration “will have to make a decision about what’s next.”

“We’ve obviously been clear on what we’re preparing for, but the president is going to make these decisions based on what we’re seeing in economic data and what we feel is certainly needed at this time in the country,” she said.