Senator Reverend Warnock led colleagues in an urgent call to President Biden to extend current waiver on federal student loan interest set to expire January 31, 2022, to help student loan borrowers still recovering from economic consequences of pandemic amidst rising costs
Current extension has allowed qualified borrowers to temporarily stop accruing interest on their student loans during the pandemic, providing relief to millions
If the waiver is not extended, interest added to principal would continue for these borrowers beginning February 1, 2022
Lawmakers: “While borrowers will begin making payments again soon, many are still dealing with financial challenges to get back on their feet as our nation works to build back better from the COVID-19 pandemic. Accumulating student loan interest can be a daunting challenge for borrowers with the lowest incomes or the heaviest student debt burdens”
Lawmakers assert that student loan repayment disproportionately burdens Black, Latino, and Native communities; repayment delay would also benefit regulatory efforts to improve student loan relief programs and repayment plans
Washington, D.C. — Today, U.S. Senator Reverend Raphael Warnock (D-GA) led a group of his Senate colleagues in calling on the Biden Administration to continue waiving borrowers’ interest on federal student loans for the duration of the COVID-19 national emergency. In a new letter, Senator Warnock and the lawmakers highlighted how current and former students are still financially recovering from the pandemic, as well as information from the U.S. Department of Education indicating that federal borrowers have saved $5 billion each month in total since they stopped accruing interest on their federal student loans due to a federal pause instituted on March 13, 2020. The lawmakers also pressed the mutual benefits of extending the waivers to delay the financial burden placed on students and colleges alike, and how the extension would also aid regulatory efforts to improve student loan relief programs. Lastly, the lawmakers underlined in their letter how the financial strain of student loan repayment disproportionately impacts families with less generational wealth.
“The Administration should extend the waiver of interest on federal student loans through the duration of the national emergency concerning the coronavirus disease of 2019 (COVID-19) pandemic. We appreciate your leadership in extending the student loan payment pause through January 31, 2022 for monthly bills due for borrowers. This extension is providing needed relief to millions of Americans. While borrowers will begin making payments again soon, many are still dealing with financial challenges to get back on their feet as our nation works to build back better from the COVID-19 pandemic,“ the lawmakers wrote.
“Accumulating student loan interest can be a daunting challenge for borrowers with the lowest incomes or the heaviest student debt burdens. Student debt has also disproportionately affected Black, Latino, and Native communities, who face significantly higher rates of student loan default and delinquency compared to other borrowers,” the lawmakers continued.
Senator Warnock has prioritized forgiving student loan debt to allow Georgians and Americans across the country to thrive economically, purchase homes, and provide for their families without the constant financial burden of student loan repayment. Earlier this year, Senator Warnock cosponsored legislation calling for the Biden Administration cancel up to $50,000 in federal student loans through executive action. Senator Warnock also led previous efforts calling on the Education Department to restore defaulted student loans to on-time status during the payment pause. The letter was signed by Senators Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Sherrod Brown (D-OH), Tammy Duckworth (D-IL), Richard Durbin (D-IL), Dianne Feinstein (D-CA), Ben Ray Lujan (D-NM), Jack Reed (D-RI), Tina Smith (D-MN), Chris Van Hollen (D-MD), Sheldon Whitehouse (D-RI), and Ron Wyden (D-OR).
READ the full letter HERE or below:
December 6, 2021
Dear President Biden:
The Administration should extend the waiver of interest on federal student loans through the duration of the national emergency concerning the coronavirus disease of 2019 (COVID-19) pandemic.
We appreciate your leadership in extending the student loan payment pause through January 31, 2022 for monthly bills due for borrowers. This extension is providing needed relief to millions of Americans. While borrowers will begin making payments again soon, many are still dealing with financial challenges to get back on their feet as our nation works to build back better from the COVID-19 pandemic. Accumulating student loan interest can be a daunting challenge for borrowers with the lowest incomes or the heaviest student debt burdens. Student debt has also disproportionately affected Black, Latino, and Native communities, who face significantly higher rates of student loan default and delinquency compared to other borrowers.
Continuing to waive student loan interest will provide borrowers with vital financial support during a time when students, borrowers, and higher education institutions are still recovering from academic and economic disruptions caused by the pandemic, including rising costs. The U.S. Department of Education (“Department”) notes the waiver of student loan interest is saving borrowers an additional $5 billion each month. This money is now available for housing, groceries, gas, and other daily necessities to help borrowers support themselves, their families, and their communities during this pandemic. It will also assist the Department in its efforts to restart payments after January 31, 2022, and regulatory efforts to improve student loan relief programs and repayment plans.
Throughout the next several months, millions of borrowers will be applying for or recertifying income-driven repayment, consolidating their loans, changing servicers, taking advantage of the Department’s recent Public Service Loan Forgiveness overhaul, and begin processing for other student loan discharge programs. Additionally, the Department may need to use forbearance of student loans to support borrowers experiencing loan transfers. However, the accumulation of interest during this forbearance period is an undue burden to students navigating a still recovering economy, and it will be significantly easier for students to navigate these complex processes and changes without having to worry about ballooning student loan bills or interest capitalization.
To continue waiving student loan interest through the end of the national emergency, the Administration should use its authority to extend the student loan interest waiver under Section 2(a)(1) of the Higher Education Relief Opportunities for Students (HEROES) Act of 2003. The COVID-19 pandemic continues to place a significant burden on students and colleges alike, and the HEROES Act is the appropriate statutory tool to ensure that federal student loan borrowers are not placed in a worse position financially as a result of the national emergency, in accordance with Section(2)(a)(2)(A).
Additionally, before the student loan payment pause expires, the Administration should act on a request that many of us have previously called for to give approximately 7.5 million borrowers a fresh start after they previously defaulted on a federal student loan. The CARES Act provides clear authority to protect borrowers from collections activity that could end up garnishing their wages and reducing their expanded Child Tax Credit, Earned Income Tax Credit, Social Security benefits, and other critical income supports. The U.S. Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies recently directed the Department to proceed with removing borrowers from default.
By automatically rehabilitating loans for borrowers who previously defaulted without the administrative barrier of requiring an application, the Administration can change the lives for millions of borrowers with the stroke of a pen. Continuing the waiver on student loan interest will provide federal student loan borrowers with a smoother process to resume repayment in the coming months as the Administration makes decisions regarding the future of the student loan program. We urge you to move forward with this request as soon as possible.
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