Defenders call on Biden to extend pause on loan repayments


Two letters were sent to the White House this week and both call on President Joe Biden to extend the current pause on federal student loan repayments.

The hiatus, first implemented by President Donald Trump and then extended by President Biden, has been in place since March 2020, but is expected to expire at the end of January 2022.

Among those calling for the moratorium to be upheld are two lawmakers from Massachusetts and several organizations with ties to the state.

Senator Elizabeth Warren co-wrote one of the letters with Representative Ayanna Pressley and Majority Leader Senator Chuck Schumer. They said if Biden extended the moratorium on federal student loan payments, it would free up about $ 85 billion over the next year.

They estimate that this is the amount borrowers would have to spend on other necessities if they didn’t have to worry about paying off their loans.

Executives at the Roosevelt Institute, a Washington, DC think tank, said the savings for each borrower could have a significant impact on the economy.

“We see that the average monthly payment of $ 393 per month for student loan borrowers is really counterintuitive in allowing households to keep as much money as possible during these tough times,” said Ali Bustamante of the Roosevelt Institute.

Student Loan Hero, a company that helps borrowers manage student debt, estimates the average student loan payment for a borrower in Massachusetts to be slightly lower than the national average, at around $ 310 per month.

The second letter was launched by the Student Loan Borrower Protection Center, an advocacy group for indebted students.

They and over 200 other organizations, including the ACLU and NAACP, co-signed the letter.

“The number of groups and the types of groups, the breadth of the types of groups, really shows how much student debt affects people across the country,” said Kat Welbeck of the Student Loan Borrower and Protection Center.

The organization estimates that 45 million borrowers across the United States are currently saving a total of $ 5 billion per month due to the moratorium.

The National Association of Social Workers, which has a Massachusetts chapter, also co-signed the letter.

Representatives of the organization have said many of their members are drowning in student debt and they believe the hiatus will help them as the pandemic continues.

They also believe it would allow them to suspend payments long enough for President Biden to address the issue of canceling the student loan.

During his campaign, President Biden said canceling student loans was one of the issues he planned to address during his tenure.

“We are working with overwhelming student loan debt. We have very high educational requirements for the clinical practice of social work in particular, the huge student loan debt associated with it. We have the depression and anxiety which has doubled during the pandemic. It has been a truly amazing time for our workforce and this payment break has at least brought some relief. Where families don’t have to worry about paying student loan payments, ”said Sarah Butts of the National Association of Social Workers.

Several other Massachusetts groups have signed the Student Loan Borrower Protection Center letter, including the Massachusetts Affordable Housing Alliance and the nonprofit Zero Debt Massachusetts.

Some economists believe the moratorium partly helped the economy recover from the pandemic by giving borrowers more money to spend.

Financial experts have also suggested that postponing student loan payments now may make borrowers less able to participate in the economy and help it grow.

Spectrum News asked the White House for a response to the two letters but did not receive a response.


Comments are closed.