Alex Padilla U.S. Senator for California

New Letter Comes One Year After President Biden’s Announcement of Student Debt Cancellation that the Supreme Court Blocked

WASHINGTON, D.C. — U.S. Senators Alex Padilla (D-Calif.), Elizabeth Warren (D-Mass.), Raphael Warnock (D-Ga.), Majority Leader Chuck Schumer (D-N.Y.), and U.S. Representatives Ayanna Pressley (D-Mass.-07), Ilhan Omar (D-Minn.-05), Jim Clyburn (D-S.C.-06), and Frederica Wilson (D-Fla.-24) led 79 other lawmakers in a letter to President Joe Biden, urging him to swiftly deliver on his promise to deliver student debt forgiveness to working and middle class families by early 2024. 

“We are extremely disappointed and concerned that the Supreme Court substituted politics for the rule of law to deny as many as 43 million hard working Americans life-changing relief from crushing student loan debt. In the wake of this outrageous decision, we appreciate your announcement initiating a rulemaking under the Higher Education Act of 1965 to deliver on debt relief and write to urge you to swiftly carry out your commitment to working and middle class families, and cancel student debt by early 2024,” wrote the lawmakers. 

Last year, President Biden announced a student debt relief plan to cancel up to $20,000 in student debt for working Americans — an estimated 90 percent of relief dollars going to borrowers earning less than $75,000 a year, and an estimated 20 million people would have seen their student debt balances eliminated entirely. This relief would have helped families start a business, buy a home, or save for retirement, and would have also helped narrow the racial wealth gap. Black families are more likely to borrow to go to school, take on higher levels of debt, and disproportionately struggle with repayment compared to their white peers. Black and Latino borrowers are also more likely than their white peers to default on their loans. If enacted, almost half of Latino borrowers and one in four Black borrowers would have had their entire debt balance forgiven under President Biden’s student debt cancellation plan. The Supreme Court blocked the plan in June 2023.

“We are facing a student loan crisis that impacts generations of borrowers who collectively hold more than $1.6 trillion in student loan debt. The burden of student debt is ever-present among vulnerable communities. Nearly one-third of Americans who hold student debt have no degree or credential. Roughly 16 percent of borrowers – including almost one third of senior citizens holding student debt – are in default, with disastrous consequences for their credit and financial health, including the garnishment of wages and government benefits. In fact, nearly three million people over the age of 62 owed more than $110 billion in federal student loans, putting seniors at risk of having their Social Security benefits garnished. More than a third of borrowers eligible for student debt cancellation under your plan are age 40 or older,” continued the lawmakers. 

The lawmakers commended President Biden’s efforts in providing a 12-month “on-ramp” to make the transition to repayment starting in October 2023 easier, but expressed concern that resuming student loan repayments without additional protections will further burden borrowers. They are urging the Department of Education to ensure the implementation of the final rule to provide debt relief does not happen after the 12-month on-ramp ends to help reduce the risk of further delinquency and default. 

“Although the Supreme Court has chosen to stand in the way of your initial student debt relief plan, we recognize that as President of the United States, you have additional tools to provide relief. Working and middle class families need this relief to come as soon as possible. We urge you to continually find ways to use your authority to bring down student debt, address the rising cost of college, and make postsecondary education affordable for all students who choose that path. Borrowers have already waited nearly a year for the relief you announced in August 2022, and critics of your plan to help 43 million Americans are likely to renew their attacks with regard to your rulemaking announcement. We urge you to reject their bad-faith, partisan attempts to delay relief and carry out your efforts to help borrowers as quickly as possible,” concluded the lawmakers. 

In addition to Padilla, U.S. Senators Mazie Hirono (D-Hawaii), Bob Menendez (D-N.J.), Ed Markey (D-Mass.), Bernie Sanders (I-Vt.), Ron Wyden (D-Ore.), Richard Blumenthal (D-Conn.), Jeff Merkley (D-Ore.), Cory Booker (D-N.J.), Sheldon Whitehouse (D-R.I.), Tammy Duckworth (D-Ill.), John Fetterman (D-Pa.), Patty Murray (D-Wash.), and Peter Welch (D-Vt.) and U.S. Representatives Eleanor Holmes Norton (D-D.C.), Katie Porter (D-Calif.-47), Veronica Escobar (D-Texas-16), Jim McGovern (D-Mass.-02), John Larson (D-Conn.-01), Jan Schakowsky (D-Ill.-09), Jasmine Crockett (D-Texas-30), Hank Johnson (D-Ga.-04), Mark Takano (D-Calif.-39), Andre Carson (D-Ind.-07), Nikema Williams (D-Ga.-05), Glenn Ivey (D-Md.-04), Dwight Evans (D-Pa.-03), Ro Khanna (D-Calif.-17), Kathy Castor (D-Fla.-14), Pramila Jayapal (D-Wash.-07), Yvette Clarke (D-N.Y.-09), Nydia Velázquez (D-N.Y.-07), Jill Tokuda (D-Hawaii-02), Barbara Lee (D-Calif.-12), Dan Goldman (D-N.Y.-10), Delia Ramirez (D-Ill.-03), Jimmy Gomez (D-Calif.-34), Jesus “Chuy” Garcia (D-Ill.-04), Mark Pocan (D-Wisc.-02), Bennie Thompson (D-Miss.-02), Nanette Diaz Barragan (D-Calif.-44), Salud Carbajal (D-Calif.-24), Alexandria Ocasio-Cortez (D-N.Y.-14), Grace Napolitano (D-Calif.-31), Linda Sanchez (D-Calif.-38), Grace Meng (D-N.Y.-06), Val Hoyle (D-Ore.-04), Judy Chu (D-Calif.-28), Adriano Espaillat (D-N.Y.-13), Raul Grijalva (D-Ariz.-07), Danny Davis (D-Ill.-07), Betty McCollum (D-Minn.-04), Don Beyer (D-Va.-08), Frank Pallone (D-N.J.-06), Alma Adams (D-N.C.-12), Madeleine Dean (D-Pa.-04), Adam Schiff (D-Calif.-30), David Trone (D-Md.-06), Maxwell Frost (D-Fla.-10), Ted Lieu (D-Calif.-36), Tony Cárdenas (D-Calif.-29), Jamaal Bowman (D-N.Y.-16), Cori Bush (D-Mo.-01), Robert Garcia (D-Calif.-42), Jonathan Jackson (D-Ill.-01), Greg Casar (D-Texas.-35), Jerry Nadler (D-N.Y.-12), Becca Balint (D-Vt.), Troy Carter (D-La.-02), Bonnie Watson Coleman (D-N.J.-12), Rashida Tlaib (D-Mich.-12), Terri Sewell (D-Ala.-07), Mark DeSaulnier (D-Calif.-10), Chellie Pingree (D-Maine-01), Sheila Jackson Lee (D-Texas-18), Sydney Kamlager-Dove (D-Calif.-37), Juan Vargas (D-Calif.-52), Brendan Boyle (D-Pa.-02), and Paul Tonko (D-N.Y.-20) signed the letter.

Full text of the letter is available here and below.

Dear President Biden: 

We are extremely disappointed and concerned that the Supreme Court substituted politics for the rule of law to deny as many as 43 million hard working Americans life-changing relief from crushing student loan debt. In the wake of this outrageous decision, we appreciate your announcement initiating a rulemaking under the Higher Education Act of 1965 to deliver on debt relief and write to urge you to swiftly carry out your commitment to working and middle class families, and cancel student debt by early 2024. 

Last year, you made the historic decision to cancel up to $20,000 in student debt for working Americans. Your plan would have provided targeted relief to families across the country, with nearly 90 percent of relief dollars going to borrowers earning less than $75,000 a year. An estimated 20 million people would have seen their student debt balances eliminated entirely, including nearly half of all Latino borrowers and one out of four Black borrowers. Providing student debt relief would not only provide breathing room for families still recovering from the COVID-19 pandemic, it would allow families to start a business, buy a home, or save for retirement.

We are facing a student loan crisis that impacts generations of borrowers who collectively hold more than $1.6 trillion in student loan debt. The burden of student debt is ever-present among vulnerable communities. Nearly one-third of Americans who hold student debt have no degree or credential. Roughly 16 percent of borrowers – including almost one-third of senior citizens holding student debt – are in default, with disastrous consequences for their credit and financial health, including the garnishment of wages and government benefits. In fact, nearly three million people over the age of 62 owed more than $110 billion in federal student loans, putting seniors at risk of having their Social Security benefits garnished. More than a third of borrowers eligible for student debt cancellation under your plan are age 40 or older.

In your August 2022 announcement to provide student debt relief, you recognized the role that providing relief would have had in narrowing the racial wealth gap. If enacted, it was estimated that almost half of Latino borrowers would have had their entire debt balance forgiven. In addition, Black families are more likely to borrow to go to school, take on higher levels of debt, and disproportionately struggle with repayment compared to their white peers. Further, Black and Latino borrowers are also more likely than their white peers to default on their loans.

We recognize that the Fiscal Responsibility Act of 2023 codifies the termination of the suspension on loan payments, interest, and collections related to the COVID-19 pandemic on August 30, 2023. Accordingly, after more than three and a half years, the interest on student loans will resume on September 1, 2023 and payments will restart by October. Recent findings from the Consumer Financial Protection Bureau, however, indicate that one in five borrowers are at risk of facing difficulties when payments resume. While we understand your administration’s efforts in providing a 12-month “on-ramp” starting on October 1, 2023 to protect borrowers during the transition to repayment, we remain gravely concerned about the Department of Education’s projections that without additional relief, student debt delinquencies and defaults will spike once repayment resumes. The Department of Education should work to ensure that implementation of the final rule to provide debt relief does not happen after the 12-month on ramp ends in effort to further reduce the risk of delinquency and default. 

You have always stood by working and middle class families. Since the beginning of your administration, you’ve demonstrated this commitment through the $116.6 billion in student loans you have forgiven for more than 3.4 million borrowers. Although the Supreme Court has chosen to stand in the way of your initial student debt relief plan, we recognize that as President of the United States, you have additional tools to provide relief. Working and middle class families need this relief to come as soon as possible. We urge you to continually find ways to use your authority to bring down student debt, address the rising cost of college, and make postsecondary education affordable for all students who choose that path. Borrowers have already waited nearly a year for the relief you announced in August 2022, and critics of your plan to help 43 million Americans are likely to renew their attacks with regard to your rulemaking announcement. We urge you to reject their bad-faith, partisan attempts to delay relief and carry out your efforts to help borrowers as quickly as possible.

Sincerely,

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