Loan Payments Due in 2022, Menendez Calls to Cancel Student Debt
A freeze on loan payments in place during the COVID-19 pandemic is set to expire in less than two months, prompting a renewed call from U.S. Sen. Bob Menendez, D-NJ, for canceled student debt.
The Democrat from New Jersey has repeated his calls to President Joe Biden to cancel student loan debt up to $50,000 per borrower, via executive authority through the Higher Education Act of 1965.
The emergency deferment period for student loan payments put in place in March 2020 is set to expire on Jan. 31, 2022.
“If two years of paused payments and 0% interest couldn’t help borrowers get back on track, it’s clear that the only path towards financial stability is for @POTUS to #CancelStudentDebt,” Menendez tweeted in November, along with a link to a Business Insider story on the issue.
“Student loan forgiveness has the power to unleash a wave of consumer-driven growth in this country — and President Biden does not need Congress to do it,” Menendez said in a written release.
“This relief would transform the lives of millions of Americans, especially poor, low-income and minority communities, narrow the racial wealth gap, and provide a much-needed shot in the arm to our economy," Menendez said.
There are about 1.3 million borrowers in the state, Menendez said, citing Lending Tree, who hold $48.8 billion in public and private student loan debt. That’s for an average balance of more than $33,000, or bills of $310 per month.
Meanwhile, over 43 million Americans hold a combined $1.6 trillion in federal student loan debt, with more than 9 million borrowers in default.
“Wealth-poor Americans are disproportionately straddled with student debt, as people without means attempt to use education to increase their economic mobility but go into debt in the process,” according to Andre M. Perry and Carl Romer, who analyzed the issue for Brookings Institute in February.
The analysis looked at three different plans for canceling student debt — one touted by Biden, another for a sliding scale model as crafted by U.S. Sen. Elizabeth Warren, D-MA, and backed by Menendez — and a third for total debt cancellation, as proposed by U.S. Sen. Bernie Sanders, D-VT.