Senator Reverend Warnock joined nearly 100 lawmakers in an urgent call to President Biden to extend the current waiver on federal student loan debt set to expire May 1, 2022, to help student loan borrowers still recovering from economic consequences of pandemic amidst rising costs
In December, Senator Reverend Warnock successfully pushed the Administration to pause payments
Lawmakers: “Canceling a meaningful amount of student debt will provide long-term benefits to individuals and the economy, helping families buy their first homes, open a small business, or invest in their retirement. More broadly, canceling student debt would add tens of billions of dollars in GDP growth”
Washington, D.C. – Yesterday, U.S. Senator Reverend Warnock (D-GA) joined a bicameral group of lawmakers in a letter to President Biden urging the Administration to act now to extend the pause on federally-held student loan payments until at least the end of the year and to provide meaningful student debt cancellation.
The payment pause has been a significant investment throughout the pandemic, providing essential relief to millions of families during the economic and public health crisis, and saving borrowers an average of $393 per month. Borrowers have greatly benefited from the ongoing payment pause, taking the opportunity to pay down other debt, relieve financial pressures from lost jobs or decreased earnings, and support their families’ needs. Restarting repayment will financially destabilize many borrowers, and will cause hardship for many who cannot afford repayment. Most borrowers are not financially prepared to shoulder another bill as they face skyrocketing costs for necessities like food and gas.
“The payment pause has been a significant federal investment throughout the pandemic, providing essential relief to millions of families during the economic and public health crisis and saving them an average of $393 per month,” wrote the lawmakers.
“Canceling a meaningful amount of student debt will provide long-term benefits to individuals and the economy, helping families buy their first homes, open a small business, or invest in their retirement. More broadly, canceling student debt would add tens of billions of dollars in GDP growth,” the lawmakers continued.
Senator Warnock has been a vocal advocate for addressing burdensome student loan debt, successfully pushing the Administration in December to extend a deferment for student loan borrowers as the nation continues to recover from the pressures of the pandemic. In addition to Senator Warnock, Senate Majority Leader Chuck Schumer (D-NY) and U.S. Senators Elizabeth Warren (D-MA), Robert Menendez (D-NJ), Bernie Sanders (I-VT), Richard Blumenthal (D-CT), Ron Wyden (D-OR), Jeffrey Merkley (D-OR), Mazie K. Hirono (D-HI), Cory Booker (D-NJ), Alex Padilla (D-CA), Sherrod Brown (D-OH), Tina Smith (D-MN), Sheldon Whitehouse (D-RI), Chris Van Hollen (D-MD), Kirsten Gillibrand (D-NY), Ed Markey (D-MA), Dick Durbin (D-IL), Tammy Duckworth (D-IL), Brian Schatz (D-HI), and Ben Ray Luján (D-NM) were also signatories on the letter, as were U.S House of Representatives Nikema Williams (D-GA), Hank Johnson (D-GA), and Sanford Bishop (D-GA) from the Georgia delegation.
The letter can be found here and below:
Dear Mr. President: We are writing to urge you to act now to extend the pause on federally-held student loan payments until at least the end of the year and to provide meaningful student debt cancellation. White House Chief of Staff Ron Klain’s recent comments about potentially extending the payment pause and administratively canceling student loan debt are encouraging to millions of borrowers across the country although there may be different ideas about the best way to structure cancellation, we all agree that you should cancel student debt now.
The payment pause has been a significant federal investment throughout the pandemic, providing essential relief to millions of families during the economic and public health crisis and saving them an average of $393 per month Borrowers have benefited greatly from the ongoing payment pause, taking the opportunity to pay down other debt, relieve financial pressures from lost jobs or decreased earnings, and support their families’ needs. Restarting repayment will financially destabilize many borrowers and their families, and will cause hardship for many who could not afford repayment. Most borrowers are not financially prepared to shoulder another bill as they face skyrocketing costs for necessities like food and gas.
While the payment pause on federally held student loans has provided essential temporary relief to families, it does not permanently address the student loan crisis. Forty-three million people are burdened with roughly $1.6 trillion in student debt and 4.4 million borrowers have been in repayment for over 20 years. Approximately nine-in-ten borrowers are not financially secure enough to restart payments in May and many cannot afford necessities their families depend on, like rent and healthcare. Borrowers choosing between paying for basic needs or their student loans often refer to their debt as a life sentence that will hamper their futures for decades. As your administration works towards rebuilding a more equitable and just economy, it should use its administrative powers to address this crisis and permanently relieve the millions of borrowers struggling with this debt. Canceling a meaningful amount of student debt will provide long-term benefits to individuals and the economy, helping families buy their first homes, open a small business, or invest in their retirement. More broadly, canceling student debt would add tens of billions of dollars in GDP growth.
Canceling student debt is one of the most powerful ways to address racial and economic equity issues. The student loan system mirrors many of the inequalities that plague American society and widens the racial wealth gap. Black students in particular borrow more to attend college, borrow more often while they are in school, and have a harder time paying their debt off than their white peers. They are more than three times as likely to go into default within four years on their federal loans as white borrowers – and face wage garnishment, tax refund withholding, and federal benefit offsets. While Latino borrowers often have lower loan balances than their white peers, they are more likely to struggle in repaying their loans, and have some of the lowest post-education earnings among all racial or ethnic groups. For example, even when controlling for educational attainment, Latinos with bachelor’s degrees earn 21% less than their white peers do. When looking at disparities in default, twenty percent of Latino borrowers defaulted on their student loans compared to 13% of white borrowers six years after starting college. On top of that, communities of color have also had higher rates of illness and death from COVID-19 throughout the pandemic. Student debt cancellation must be one of the key actions in your comprehensive approach to advance equity as our nation works to rebuild a stronger and more equitable economy.
While we applaud your efforts to date – including targeted relief for disabled borrowers, victims of for-profit colleges, and others as well as working to fix existing programs like Public Service Loan Forgiveness – these efforts still leave the majority of federal student loan borrowers out. Right now, your administration has a historic opportunity to repair the damage caused by decades of policy failures, government mismanagement, and industry abuses by extending pandemic relief and canceling student debt. The majority of Americans support you taking action; recent polling shows that over 60% of likely voters support continuing to pause student loan payments and canceling student debt, with support strongest among likely voters of color. Given the fast-approaching deadline for borrowers to resume payments, your administration must act as quickly as possible to extend the pause and make clear to the American public your intention to cancel a meaningful amount of student debt. We look forward to supporting your administration in getting it done.
Thank you for your attention to this important matter.
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