KEY POINTS

  • Democrats urge Biden to "act swiftly" on the matter
  • The push for reforms of the student loans program delays Kvaal confirmation as undersecretary of education
  • Warren is "negotiating with the Biden administration on the implementation of a tougher oversight of loan servicing companies"

Massachusetts Sen. Elizabeth Warren is said to be delaying the confirmation of President Joe Biden’s pick, James Kvaal, as undersecretary of education as she, along with Senate Majority Leader Chuck Schumer and other Democrats, push for the restructuring of the federal student loans.

In total, 64 Democrats have urged Biden for an additional six-month extension of student loan payments that were deferred until September due to the COVID-19 pandemic, according to Business Insider.

A report by The Washington Post states that Warren is “impeding” Kvaal’s confirmation to “secure commitments on student loan reforms.” His nomination to the post was advanced with bipartisan support by the Senate's education panel in April. 

According to the report, Kvaal has advocated for several reforms backed by Warren that include updating student loan policies for public servants, going after predatory colleges, and helping defrauded borrowers.

In a letter sent to Biden on Wednesday, the Democrats requested him to “act swiftly” on extending the current pause on payments for student loans “for at least six months - until March 31, 2022- or until the economy reaches pre-pandemic employment levels, whichever is longer.”

“The suspension of payments and interest during the pandemic has provided essential relief to borrowers and their families during this economic and public health crisis … Borrowers have reaped significant benefits from the ongoing payment pause, taking the opportunity to pay down other debt, relieve financial pressures from lost jobs or decreased earnings, and support their families’ needs,” the letter read.

Former President Donald Trump issued a student loan moratorium in March 2020 that suspended payments and froze interest until December 31. On Biden’s first day in office, it was extended until September.

The lawmakers warned in the letter that “the scheduled resumption of student loan payments in October could create a significant drag on our economic recovery.” They also stated that women and people of color remain disadvantaged even as the economy, hit by the COVID-19 pandemic, gets back on track.

Citing research from the Heller School for Social Policy and Management at Brandeis University, the Democrats' letter pointed out that the median Black borrower still owes 95 percent of their debt 20 years after starting college, compared to only 6 percent for the median white borrower.

“Black students, in particular, borrow more to attend college, borrow more often while they are in school, and have a harder time paying their debt off than their white peers,” the letter stated.

The Washington Post report said that Warren is currently negotiating with the Biden administration regarding the implementation of a “tougher oversight of loan servicing companies.”

In April, she had asked the education department to end contracts with abusive loan companies that manage the collection of college loan payments on behalf of the government.

Student loans Americans have nearly $2 trillion in student loans Photo: Pixabay