Members of President Joe Biden’s own party are urging him to go even further in his attempts to provide more student loan debt relief, despite the fact that he’s already put in motion an order that will cancel billions of dollars in debt for hundreds of thousands of borrowers.
On Wednesday, many Democratic lawmakers sent Biden a letter that urged him to live up to the promises he has made in regard to student loan debt relief. This comes not long before interest will soon begin to accrue again on student loans, after more than three years of having that paused due to the COVID-19 pandemic.
The letter, which was signed by leading Democrats such as Massachusetts Senator Elizabeth Warren and Senate Majority Chuck Schumer, read:
“We are extremely disappointed and concerned that the Supreme Court substituted politics for the rule of law to deny as many as 43 million hard working Americans life-changing relief from crushing student loan debt.
“In the wake of this outrageous decision, we appreciate your announcement initiating a rulemaking under the Higher Education Act of 1965 to deliver on debt relief and write to urge you to swiftly carry out your commitment to working and middle class families, and cancel student debt by early 2024.”
Biden’s initial plan was to cancel as much as $20,000 in federal student loan debt for borrowers who qualified. The Supreme Court shot down that plan through a decision it made earlier in the summer.
That didn’t stop Biden from pressing forward with other efforts to provide student debt relief, though. The Biden administration began to negotiate a new rulemaking process so that a new form of forgiveness could go into effect.
While the White House has said that this direction should hold up in court – if it were to be challenged – it will likely take a lot longer for them to implement than previous efforts. The Biden administration hasn’t provided additional details on the total amount of student loan debt relief could come from this plan, nor which borrowers would be eligible to receive the relief.
While the administration is pursuing those avenues, it is also starting to “on-ramp” the resumption of federal student loan repayments, which will begin again in October.
Even though payments will come due again that month, borrowers won’t be penalized financially if they miss payments when they restart. Their loans will just continue to accrue interest in the instance of missed payments. That approach will last for one more year.
But, as the letter from the Democratic lawmakers to Biden states:
“While we understand your administration’s efforts in providing a 12-month ‘on-ramp’ starting on October 1, 2023, to protect borrowers during the transition to repayment, we remain gravely concerned about the Department of Education’s projections that without additional relief, student debt delinquencies and defaults will spike once repayment resumes.
“The Department of Education should work to ensure that implementation of the final rule to provide debt relief does not happen after the 12-month on ramp ends in effort to further reduce the risk of delinquency and default.”
