Dozens of Democrats in the U.S. Senate and House signed a letter Tuesday reiterating their support for President Joe Biden’s student loan forgiveness plan.
The letter, addressed to the president and provided exclusively to USA TODAY, comes as the Biden administration navigates various court challenges and as more than 40 million Americans are left hanging in the legal limbo.
Biden in August unveiled his plan to cancel up to $20,000 in student loan debt for borrowers making less than $125,000. Though the application has since closed, roughly 26 million of the 40 million eligible borrowers had applied for relief.
Last week, a conservative-leaning U.S. Supreme Court signaled skepticism of broad debt forgiveness as it heard arguments in two cases taking issue with Biden’s plan. And on Friday, the refinancing firm SoFi filed a separate lawsuit seeking to end the pandemic-era pause on student loan payments.
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Despite the roadblocks, the new letter hints at upcoming efforts in Congress to chip away at student loan debt.
“The debt relief program will help so many borrowers as they continue to recover from the financial distress of the pandemic,” says the letter, signed by 24 senators and 102 representatives, all progressives who have been vocal in their support for student loan debt forgiveness. “We strongly support your debt relief plan and look forward to partnering with you to ensure every eligible borrower receives it.”
Lead writers include Sens. Chuck Schumer, Bernie Sanders, Elizabeth Warren and Alex Padilla and Reps. James E. Clyburn, Ayanna Pressley, Ilhan Omar and Frederica S. Wilson.
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The Biden administration has declined to say if it has plans for alternative routes to provide mass debt relief. But Biden previously suggested he’d favor an approach involving Congress’s signoff.
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Congress may be more of an option than many have considered, said Sheila Bair, former chair of the FDIC and former college president.
“They could go to the hill,” Bair said. “I think a more modest plan, actually, there could be some bipartisan support.” She specifically mentioned House Education and Workforce Committee Chair Virginia Foxx and Republican Sen. Susan Collins as lawmakers who might sign on to a pared down version of loan forgiveness.
Foxx, for instance, has called out colleges with seemingly runaway tuition prices.
“It’s hard to get any accountability for schools that keep raising tuition,” said Bair, now a senior adviser to Student Debt Smarter, which aims to help prospective students understand how much college will really cost. Loan forgiveness, packaged with legislation that imposes reforms on institutions, could get traction among lawmakers.
“I would hope they would pursue that,” Bair said.
But Biden’s debt relief plan has critics on both sides of the aisle. Tuesday’s letter excluded key Democrats, including Rep. Nancy Pelosi, who was initially skeptical of the president’s ability to cancel debt on his own, and Sen. Joe Manchin.
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Pressure to act as student loan payment pause faces a challenge
Federal student loan payments have been on pause for roughly 43.5 million Americans thanks to pandemic relief measures created, then extended, under former President Donald Trump and further extended by Biden.
The timeline for their reinstatement is tied to when the Supreme Court issues a ruling on its case, though the moratorium is slated to last at least a few more months.
The SoFi lawsuit marks one of the first attempts to end the payment pause through litigation.
A return to loan payments, absent avenues for relief, could throw many borrowers into financial disarray. “This is a real disaster waiting for us,” said Abby Shafroth, a senior staff attorney at the National Consumer Law Center and director of the Student Loan Borrower Assistance Project.
In 2019, before the pandemic, a student loan borrower went into default every 30 seconds, Shafroth said.
“As our Nation recovers from the pandemic, your cancellation plan will provide critical relief to millions of families and help avert a sharp rise in delinquencies and defaults,” the letter from Congress reads, pointing to significant racial gaps in loan and default rates.
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Contributing: Nirvi Shah, USA TODAY
Contact Alia Wong at (202) 507-2256 or awong@usatoday.com. Follow her on Twitter at @aliaemily.
Contact Chris Quintana at (202) 308-9021 or cquintana@usatoday.com. Follow him on Twitter at @CQuintanadc.