Major unions ACLU and SEIU join 126 organizations in calling on Biden to extend the freeze on student-loan payments

Joe Biden
President Joe Biden. Evan Vucci/AP
  • 128 organizations sent a letter to Biden urging him to extend the student-loan payment pause.
  • They want the pause maintained until Biden reforms student-loan programs and cancels student debt.
  • This week, Elizabeth Warren and Chuck Schumer urged Biden to extend the pause by six months.
  • See more stories on Insider’s business page.

President Joe Biden extended the pause on student-loan payments through September, but as that date is getting closer and closer, lawmakers and advocates say borrowers are still suffering financially from the pandemic. That’s why they are calling on the president to further extend the pause.

Led by the Student Borrower Protection Center, 128 organizations, including the American Civil Liberties Union (ACLU) and Service Employees International Union (SEIU), sent a letter to Biden on Thursday urging him to extend the payment pause until the administration has followed through on its promises to fix the student-loan system and cancel federal student debt.

“The student loan payment pause has been one of the most important investments the federal government has made in Americans’ financial lives in a generation – a recognition that the inadequacies of the existing student loan safety net could not protect families in the midst of an economic and public health crisis,” the organizations wrote.

The letter cited a number of failures in the student-loan system during just this year, including low numbers of disability discharges and high denial rates for the Public Service Loan Forgiveness (PSLF) program, as examples of how the system is failing borrowers and why borrowers are not ready to resume paying their loans come October.

According to his campaign website, Biden would “see to it that the existing Public Service Loan Forgiveness Program is fixed,” but as Insider previously reported, 98% of applicants are still being rejected from the program. He also said during his campaign that he would immediately cancel $10,000 in student debt per borrower – he hasn’t yet done that, either.

The organizations’ letter comes just days after Massachusetts Sen. Elizabeth Warren and Senate Majority Leader Chuck Schumer led some of their Democratic colleagues in sending a letter to Biden requesting the payment pause be extended at least six months or until the economy returns to pre-pandemic employment levels, whichever is longer. They said the pause has provided “essential relief” to borrowers.

Warren was also one of the Democrats that sent a letter to the CEOs of all student-loan servicers on Monday, requesting information on how they are best preparing borrowers to restart loan payments and warning of the “disastrous” consequences of dropping borrowers back into repayment without proper assistance.

Cardona said during a Senate hearing last week that he is continuing to have conversations on extending the payment pause past September, but the Education Department declined to provide further details on those conversations.

“President Biden should act quickly to pause payments and interest for federally-held student loans as our country continues to recover from the historic COVID-19 health and economic crisis,” Schumer said in a statement. “Failing to extend this pause would not only hurt our nation’s struggling students, but it could also impact future economic growth and recovery.”