It's a 'grave mistake' for Biden to resume student-loan payments without first giving borrowers debt relief, 179 advocacy groups say

• Student-loan payments are set to resume in October without broad debt relief.
• Nearly 200 organizations called on Biden to deliver relief before payments resume.
• Biden has started the process to enact debt relief again, but it could take months.

Student-loan borrowers are inching closer and closer to a payment resumption without the broad debt relief they were promised. Nearly 200 organizations don't want to see that happen.

On Wednesday, 179 advocacy groups and unions — including the Student Borrower Protection Center, AFL-CIO, and NAACP — sent a letter to President Joe Biden urging him to provide student-debt relief to millions of borrowers before they have to resume repayment. 

The Supreme Court struck down Biden's broad plan to cancel up to $20,000 in student debt for federal borrowers at the end of June, and shortly after the decision, the Education Department announced it would be pursuing a new route to cancel student debt using the Higher Education Act of 1965. That route requires the administration to undergo the negotiated rulemaking process, which could take months due to public hearings and negotiations. But payments are still scheduled to resume in October, and the advocacy groups do not want borrowers to foot another bill without any relief.

"The recently signed Fiscal Responsibility Act which suspends the debt ceiling until 2025 while codifying the end of the student loan payment pause—a crucial economic lifeline for millions— has made it all the more urgent to act now to cancel student debt before payments resume," the groups said in the letter.

"While the Administration has announced notable steps to mitigate the harshest economic consequences for borrowers—including shielding borrowers from negative credit reporting, delinquencies and defaults should they fall behind—restarting the fundamentally broken student loan system without first delivering on the relief promised to borrowers remains a grave mistake, and will only exacerbate already dire economic situations for millions of American households," they continued.

The groups were referring to Biden's announcement that he would implement a 12-month "on-ramp" period once payments resume, which would protect borrowers from negative credit reporting should they miss any payments. However, interest would still accrue during that time, so borrowers' balances would still grow — and even more so without any broad debt relief.

Biden's administration has repeatedly said it would work to go through the rulemaking process as quickly as possible, but at this point, the process will not be completed before payments resume in October due to the negotiated rulemaking timeline.

"We want to help borrowers who were let down by the fundamental bargain of federal student loans—that investments in yourself and your education will help lead you to a better life," Under Secretary of Education James Kvaal said during a Tuesday public hearing. "By those who have seen their debts get out of hand, even as they make the payments we ask of them. We will help as many borrowers as possible, and we will work as quickly as possible under the law."

Still, Republican lawmakers remain opposed to any form of additional relief. Along with planning to implement a new income-driven repayment plan, the department announced debt relief last week for over 800,000 borrowers through a one-time account adjustment for IDR plans. Top Republican on the House education committee Virginia Foxx said in a statement that Biden's "blatantly political attempt to circumvent the Supreme Court is shameful. The Biden administration is trampling the rule of law, hurting borrowers, and abusing taxpayers to chase headlines."