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Merkley, Wyden, Colleagues Urge Biden Administration to Extend Student Loan Payment Pause and Cancel Student Debt

Merkley, Wyden, Colleagues Urge Biden Administration to Extend Student Loan Payment Pause and Cancel Student Debt

Washington, D.C. – Oregon’s U.S. Senators Jeff Merkley and Ron Wyden sent a letter to President Joseph R. Biden urging the administration to act now to extend the pause on federally-held student loan payments until at least the end of the year and to provide meaningful student debt cancellation.

“Given the fast-approaching deadline for borrowers to resume payments, your administration must act as quickly as possible to extend the pause and make clear to the American public your intention to cancel a meaningful amount of student debt. We look forward to supporting your administration in getting it done,” wrote the lawmakers.

The payment pause has made a significant difference throughout the pandemic, providing essential relief to millions of families during the economic and public health crisis, and saving borrowers an average of $393 per month. Borrowers have greatly benefited from the ongoing payment pause, taking the opportunity to pay down other debt, relieve financial pressures from lost jobs or decreased earnings, and support their families’ needs. Restarting repayment will financially destabilize many borrowers, and will cause hardship for many who cannot afford repayment. Most borrowers are not financially prepared to shoulder another bill as they face skyrocketing costs for necessities like food and gas.

Black students in particular borrow more to attend college, borrow more often while they are in school, and have a harder time paying their debt off than their white peers. They are more than three times as likely to go into default within four years on their federal loans as white borrowers – and face wage garnishment, tax refund withholding, and federal benefit offset. Latino borrowers are more likely to struggle in repaying their loans and have some of the lowest post-education earnings among all racial or ethnic groups. For example, even when controlling for educational attainment, Latinos with bachelor’s degrees earn 21% less than their white peers do. When looking at disparities in default, twenty percent of Latino borrowers defaulted on their student loans compared to 13% of white borrowers six years after starting college. On top of that, communities of color have also had higher rates of illness and death from COVID-19 throughout the pandemic.

“Canceling student debt is one of the most powerful ways to address racial and economic equity issues. The student loan system mirrors many of the inequalities that plague American society and widens the racial wealth gap,” they continued. “Student debt cancellation must be one of the key actions in your comprehensive approach to advance equity as our nation works to rebuild a stronger and more equitable economy.”

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