Legislatively Speaking
By Senator Lena C. Taylor
Lena C. Taylor
Recently, I had constituents ask for an update on the status of the federal student loan debt relief proposal. Confusion has surrounded President Biden’s pandemic-connected proposal ever since six Republican-controlled states filed a lawsuit. Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina have asserted that Biden had no authority to change provisions of the federal student financial aid program.
However, while relying on language from the “HEROES Act,” the Biden administration has said they are well within their rights to adjust the policies of the program. In a recent letter from Miguel Cardona,
U.S. Secretary of Education, Cardona writes “As we continue to fight to provide debt relief for tens of millions of Americans, President Biden and I believe that it is unfair to ask tens of millions of borrowers to resume payments on their student debt when they would be eligible for relief– if not for these lawsuits. Therefore, we have extended the pause on student loan payments and collections.”
Yes you heard right. For the millions of Americans that have been able to get a hold of their finances and begin to dig their way out of crippling debt, this period has been monumental. According to the Education Data Initiative, “student loan debt in the United States totals $1.745 trillion. The debt accumulation rate is slowing, and recent analytics indicate that most consumers manage their student loan debt responsibly. The outstanding federal loan balance is $1.617 trillion and accounts for 92.7% of all student loan debt. 42.8 million borrowers have federal student loan debt and the average federal student loan debt balance is $37,787 while the total average balance (including private loan debt) may be as high as $40,780. Less than 2% of private student loans enter default as of 2021’s fourth financial quarter (2021 Q4). The average public university student borrows $32,880 to attain a bachelor’s degree.”
This information contradicts the messaging that Republicans have crafted on this issue. Painting the relief program as help for the wealthy and at the expense of taxpayers. They have managed to create another “wedge” issue, to sew division in this country. They have villainized every day, hardworking folks who sought a college education. The Biden administration is having none of it.
According to Cardona, “Lawyers for the administration countered that the Department of Education has “broad authority to manage the federal student financial aid programs.” A court filing stated that the 2003 Higher Education Relief Opportunities for Students Act, or HEROES Act, allows the secretary of education to waive or modify terms of federal student loans in times of war or national emergency”. COVID-19 and the ensuing fallout is a national emergency!
Roughly 26 million borrowers have sought consideration for debt relief and 16 million applications have already been approved.
While the policy works its way through the courts, the Biden administration believes its unfair for borrowers to make payments during this time. Per the U.S. Department of Education, the student loan payment pause is extended until 60 days after the Department is permitted to implement the debt relief program, or the litigation is resolved. If the program has not been implemented and the litigation has not been resolved by June 30, 2023, payments will resume 60 days after that. Borrowers will be notified before payments restart, if needed.
To learn more, please visit StudentAid.gov.