Student-loan borrowers shouldn't have to pay off debt Biden 'has promised to cancel,' 180 organizations say — and they're calling for another payment-pause extension



Ayelet Sheffey
Thu, June 30, 2022 

President Joe Biden says he's nearing a decision on broad student-loan-debt forgiveness.Drew Angerer/Getty Images

• Over 180 organizations wrote to Biden urging him to extend the student-loan payment pause.

• They said borrowers should not have to make payments until debt cancellation is "fully implemented."

• Payments are set to resume on September 1, and no announcement of broad relief has yet been made.

Almost 200 organizations want to ensure that federal student-loan borrowers don't pay a penny on their debt until President Joe Biden cancels some of it.

On Thursday, 180 organizations led by the advocacy group Student Borrower Protection Center signed a letter urging Biden to cancel student debt and extend the current pause on most federal student-loan payments that's set to expire after August 31.

With recent reports suggesting Biden is considering $10,000 in relief for borrowers making under $150,000 a year, advocates have worried that targeting the relief will cut out the borrowers who need it the most — and they want to ensure payments do not resume before loan forgiveness hits all federal borrowers' accounts.

Groups, including the NAACP and trade unions such as AFSCME, wrote: "We strongly urge your administration not to threaten the financial security of people with student debt as a tactic to fight inflation. Instead our organizations urge you to enact robust student debt cancellation that is not means tested and does not require an opt-in for participation and to fully implement this policy before any student-loan bill comes due."

"People with student debt cannot be required to make payments toward loans your administration has promised to cancel," they added.

Mike Pierce, the executive director of the Student Borrower Protection Center, previously spoke with Insider regarding the bureaucratic hurdles that would accompany targeting student-loan relief. As seen in the past with income-driven repayment plans and the Public Service Loan Forgiveness program, simple errors with paperwork could block borrowers from relief they were eligible for, and Pierce said the same could happen should borrowers need to take individual action to access broad debt cancellation.

"You're not making the policy more progressive because of how hard it's going to be for folks to demonstrate that they have a low enough income to benefit," Pierce said.

Biden is likely to announce broad student-loan forgiveness in July or August, but another extension of the payment pause doesn't seem as likely given his administration's concerns with inflation. Jared Bernstein, a member of the White House Council of Economic Advisers, previously told The New York Times that "the key economic fact here is that if debt payment restart and debt relief were to occur at roughly the same time, the net inflationary effect should be neutral."

Republican lawmakers have also cited inflation as a reason not to extend the pause and cancel student debt, with some even introducing legislation to resume payments and block any broad debt relief. But advocates and Democratic lawmakers have maintained that now is the time for Biden to go big on relief and ensure it's a smooth process that all federal borrowers can access.

"It is important that borrowers get relief quickly and aren't hampered by unnecessary roadblocks and obligations," Minnesota Rep. Ilhan Omar recently wrote to the Education Department. "The American public will depend on your agency's ability to deliver debt cancellation quickly and efficiently, no matter the effort and resources required."