Senate Education Committee chair calls on Biden to extend student loan pause to 2023

The chair of the US Senate’s Education Committee has urged President Joe Biden to extend a pause on student loan debt repayment until “at least” 2023.

US Democratic Senator Patty Murray also urged the administration to “provide immediate relief by forgiving some debt for all borrowers” and to “permanently” fix the nation’s student loan system, as millions of Americans are set to resume payments following a two-year pause during the Covid-19 pandemic.

More than 40 million Americans hold roughly $1.75 trillion in student loan debt, most of which is in federal loans.

Since March 2020, most federal student loan borrowers have been able to pause their monthly payments, with interest rates set at zero per cent, following congressional passage of the CARES Act and five subsequent extensions that gave Americans dramatic financial relief during the pandemic’s economic fallout. Payments are now scheduled to resume in May.

Senator Murray told The Washington Post on 16 March that the administration should not only extend the pause for at least another year but also “make sure when payments resume, borrowers get a fresh start”.

“I’ve heard horror stories from so many people who are struggling with the system. It’s not just an inconvenience, it’s just not working,” she told the newspaper.

Her comments follow notices sent from the US Department of Education to companies that service federal student loans to halt repayment reminders to borrowers, potentially signaling that the administration could extend the pause.

White House chief of staff Ron Klain also told the podcast Pod Save America earlier this month that “the president is going to look at what we should do on student debt before the pause expires, or he’ll extend the pause.”

Debt relief advocates and some progressive legislators argue the president can cancel nearly all of it with the stroke of a pen.

“So the question of whether there’s some executive action on student debt forgiveness, when the payments resume, is a decision we’re going to take before the payments resume,” Mr Klain said.

“Dealing with the executive branch question of what we should do about that, what his powers are, how much we should do on that, that’s something we’re going to deal with later on,” he added.

In a statement to The Independent, an Education Department spokesperson did not confirm reports that the administration could be signaling an extension but said that the agency’s Federal Student Aid office will “continue communicating regularly with servicers about the type and cadence of servicer outreach to borrowers”.

White House officials have been mulling for months whether the president or Education Department Secretary Miguel Cardona have the legal authority to unilaterally cancel debt, but publicly, the administration has said only that the president is waiting for legislation from Congress.

During his campaign, Mr Biden proposed canceling up to $10,000 in student loan debt. In November 2020, weeks before he entered the White House, he even said that student debt relief should happen “immediately” when he entered office.

Last week, Republican House members Jim Banks and Bob Good introduced a bill to block the administration from extending the pause.