Student loans: Senator proposes plan to extend payment pause; cut some debt for all

Sen. Patty Murray is urging President Joe Biden to extend the suspension of student loan payments until next year and to adopt four measures for the program that will eventually lead to a cancellation of the debt.

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Murray, D-Washington, is calling on Biden to suspend for the fourth time student loan payments for some 43 million federal loan borrows and work on repairing the system she blames for “ruining lives.”

“This loan system is unacceptable and we can fix it,” Murray said. “When you get a loan to afford higher education, you deserve a system that works. It should be easy to enroll in a sensible repayment plan, no one should end up with a monthly payment they can’t afford, and debt relief shouldn’t require making it through a gauntlet of paperwork.

“This is not too much to ask — so until we fix our student loan system, the student loan payment pause must continue to provide borrowers much-needed relief.”

The pause on student-loan payments along with waived interest charges, has been in effect for more than two years. The measure was implemented as part of former President Donald Trump’s COVID-19 relief measures.

Biden continued to pause the payments once he became president and extended the pause for a third time in September 2021. The current pause is scheduled to end on May 1.

It is unclear if that deadline will be suspended, but the president’s chief of staff has signaled that may be a possibility.

Ron Klain suggested on a recent podcast that work needs to be done on the repayment program before it is reinstated.

“The President is going to look at what we should do on student debt before the pause expires, or he’ll extend the pause,” Klain said. “The question whether or not there’s some executive action on student debt forgiveness when payments resume is a decision we’re going to take before payments resume.”

Murray said she wants Biden to take the time to “permanently fix” the system.

“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.”

Murray, the chairwoman of the Senate Committee on Health, Education, Labor and Pensions, has laid out four proposals to help restructure repayments for the federal student loan program, with one that would forgive some of the debt for all borrowers.

Murray proposes:

1. Giving borrowers a fresh start by placing those who were in default back in good standing on their credit reports;

2. Capping income-driven repayment plans at 10% of discretionary income and making it easier to access those plans;

3. Extending the deadline for the Public Service Loan Forgiveness (PSLF) waiver that allows payments that were ineligible toward the school loan debt to now count toward loan forgiveness;

4. Forgiving some student debt for all borrowers “while prioritizing those struggling the most.”

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