Will White House pause student loan repayments amid looming government shutdown?
As the country braces for a potential government shutdown, student loan advocates have called for President Joe Biden to pause repayments for borrowers yet again.
Rep. Ayanna Pressley, D-Mass., led the charge this week in Congress in a statement calling for student loan payments not to resume on Oct. 1.
The progressive lawmaker said the student loan payment pause, which has been in effect since the pandemic began in 2020, has been a “lifeline for borrowers across the nation.”
“This Republican government shutdown stands to harm families across the nation, many who were just regaining their financial footing for the first time since the COVID-19 crisis,” said Pressley. “The administration should absolutely pause student loan payments and interest accrual in light of these stark realities.”
If a government shutdown happens as feared, millions of federal workers and military members will go unpaid, and critical federal services, including food assistance, will not be available for those who rely on them.
The shutdown, however, would also impact federal student loan servicers, whom borrowers rely on for assistance in navigating the repayment process.
The head of the nonprofit Student Borrower Protection Center called on the Biden administration to essentially defund the student loan system in light of a looming shutdown.
“If House Republicans shut down the federal government, the Biden administration must shut down the student loan system too,” said Mike Pierce, executive director of the Student Borrower Protection Center.
Pierce said continuing to pay student loan companies while “furloughing federal employees who are supposed to help borrowers when things don’t go according to plan” will result in “more borrowers receiving bad information with less oversight and fewer resources to fix problems.”
He added, “40 million people are being thrown to the wolves. It will be a catastrophe.”
Pressley said, “To throw borrowers back into repayment with bad-faith loan servicers and an understaffed Department of Education is a recipe for disaster.” She added that it would “deeply undermine the progress we have made to advance economic justice for student loan borrowers.”
The champion of student loan cancellation said that while the White House is working “diligently to push back on the corrupt Supreme Court’s obstruction of President Biden’s historic cancellation plan,” the federal government should take “immediate steps to prevent borrowers from entering into repayment at a time when the infrastructure is not there, and bad actors will seize on the lack of government capacity caused by Republican dysfunction.”
When asked by theGrio if the White House is having talks of pausing student loan payments again, Education Secretary Miguel Cardona suggested that the administration has its hands tied.
“When the debt ceiling negotiations took place, it was required that the payments start up again. And that was something that the president and Speaker [Kevin McCarthy] had to shake hands on and agree to keep the government open now,” explained Cardona.
Though he said Republicans have “reneged” on their agreement with the White House, which he called unfortunate, ultimately, Congress “put an end to any potential conversations about further extending the pause” after it passed into law a requirement to restart payments for student loans when it moved to raise the debt ceiling.
U.S. Rep. Jasmine Crockett, D-Texas, told theGrio she also thinks borrowers, particularly those who would be impacted by a shutdown, should get further relief from paying back their student loans.
Referring to Republicans for going back on their word in the agreement they made with President Biden, the freshman congresswoman said, “They don’t care about agreements. I don’t know why we should.”
Crockett also had a message for borrowers: “For anyone upset about how we do student loans in this country, the answer is to make sure that you vote for Democrats because there is no Republican that is on our side.”
She added, “If we can get Congress to act, then we’re not trying to get the president to come up with creative solutions.”
Without a student loan pause, Secretary Cardona encouraged student borrowers to utilize the Biden-Harris administration’s new SAVE Plan, an income-based repayment plan that most borrowers are eligible for. The plan, which bases payments on how much borrowers earn rather than what they owe, launched in June as part of Biden’s Plan B after the Supreme Court struck down his student debt cancellation program.
“It’s the most affordable plan,” the secretary told theGrio. Cardona also noted that it has given borrowers a yearlong grace period where borrowers struggling to make payments won’t be penalized.
“We are looking out for borrowers. We’re going to continue looking out for borrowers, and we’re going to continue fighting for debt relief,” said Cardona.
The Biden administration is still pursuing broad student debt cancellation for millions of borrowers through the Higher Education Act. However, the Department of Education must first go through a months-long rulemaking process, including public feedback.
As payments resume in just days, administration officials urged the public to visit StudentAid.Gov to learn more about the programs available to eligible borrowers.
Gerren Keith Gaynor is a White House Correspondent and the Managing Editor of Politics at theGrio. He is based in Washington, D.C.
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