New Student Loan Forgiveness Proposal Could Pause Payments, but It’s Not Without Critics
A new four-point plan unveiled by Sen. Patty Murray (D-Washington) would extend the federal student loan pause to 2023 and cancel student loans for certain borrowers, but she’ll probably have a hard time convincing other lawmakers to go along.
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Murray, chairwoman of the Senate Health, Education, Labor and Pensions Committee, urged President Joe Biden to consider her proposal, Forbes reported — especially the part about extending the student loan pause. That pause went into effect two years ago to provide relief to borrowers during the COVID-19 pandemic, but is due to expire May 1.
“When I talk to student loan borrowers in Washington state, one thing is painfully clear: the student loan system is broken,” Murray said in a statement. “It is ruining lives and holding people back. Borrowers are struggling with rising costs, struggling to get their feet back under them after public health and economic crises, and struggling with a broken student loan system — and all this is felt especially hard by borrowers of color.”
Among the highlights of Murray’s proposal:
- Student loan borrowers who were in default before the pause took effect in March 2020 should have their negative credit histories cleared and given a chance to rehabilitate their student loans.
- Income-driven repayment plans should be revised to make them available to more borrowers, simplify the enrollment process, prevent student loan debt from becoming unmanageable, cap monthly payments at no more than 10% of discretionary income, and replace existing income-driven repayment plans.
- More borrowers should get student loan forgiveness by extending federal waivers for Public Service Loan Forgiveness
- Student loans for certain borrowers should be canceled, with a special priority on canceling the loans of people of color; those with low income; those who have been making student loan payments for 20 years; and those who left college without a degree or credential.
The challenge is convincing Congress to pass the proposal. U.S House Reps. Jim Banks (R-Indiana) and Bob Good (R-Virginia) have already introduced legislation that would block the Biden administration from extending the payment pause, the Washington Post Reported.
Find: The 9 Fastest Ways To Pay Off Student Loans, According To Experts
Learn: How To Refinance Your Student Loans
Meanwhile, Rep. Virginia Foxx (R-North Carolina), the top Republican on the House Education and Labor Committee, has been a vocal critic of Biden’s student loan policy.
“Another repayment freeze only begets unfairness that is inevitably leveled at both taxpayers and responsible borrowers alike,” Foxx said in a statement this week. “Kicking the can down the road at their expense is the epitome of imprudent.”
Foxx also has urged the administration to restart student loan repayments, the WaPo noted.
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