Top Democrats Warn Biden Against Student Loan, Eviction Restart

Top Democrats and left-leaning allies are urging the Biden administration to push back the imminent restart of student loan payments and evictions for tens of millions of Americans, demanding the president use his executive authority.

Senate Majority Leader Chuck Schumer, Representative Ilhan Omar of Minnesota and New York Representative Jamaal Bowman are among the Democrats demanding President Joe Biden extend the federal government's eviction moratorium and pause on student loans. Schumer joined numerous student loan reformers last week in warning Biden and Congress that the planned October 1 restart of payments will be a "catastrophe" for many of the country's 43 million borrowers.

Omar and Bowman were just two lawmakers who ridiculed the White House over the suggestion they don't have the authority to extend the eviction moratorium, which ended Saturday. Congresswoman Alexandria Ocasio-Cortez on Sunday told CNN she partially blames "conservative Democrats in the House" for allowing the moratorium to expire. She also blasted the White House for "waiting until the day before the House adjourned" to release a hollow token of support for extending the moratorium.

"Should payments resume on Oct. 1, millions of students, borrowers and parents will be abruptly pushed back into repayment at the same time," Schumer wrote in a Wednesday op-ed with Natalia Abrams, executive director of Student Debt Crisis. "Even those who are living paycheck to paycheck or without paychecks at all."

The Biden administration has not backed either an extension of student loan relief or the eviction moratorium, initiatives put in place during the start of the coronavirus pandemic. A June Supreme Court ruling declared the Centers for Disease Control and Prevention's eviction moratorium unlawful, prompting the White House to focus on dispersing a record $1.5 billion in rental assistance in that month alone.

The White House's largely silent stance, even three days after the end of the eviction moratorium, prompted a U.S. Capitol sit-in protest Saturday night and concerns among Democratic strategists they might be rejected in the midterm elections should they fail to act on these measures.

"The White House says it doesn't have authority to extend the eviction moratorium or cancel student debt. But it hasn't had a problem conducting airstrikes without authorization from Congress," tweeted Bowman, echoing the urgent demands of numerous progressive lawmakers, including Missouri's Cori Bush and Washington state's Pramila Jayapal.

The student loan moratorium ends in September — but TWO-THIRDS of borrowers say it would be difficult to restart paying them.

There's a crisis looming. @POTUS needs to cancel student debt now.

— Pramila Jayapal (@PramilaJayapal) August 1, 2021

"Obviously, cancelling student loan debt is the right policy. But also – the politics of restarting student loan payments next month are f**king terrible. Why on earth, if you're a Democrat who cares about the midterms, would you want to?" remarked Matthew Cortland of the progressive think tank Data Progress.

But Biden faces several daunting challenges in pushing back the eviction and student loan deadlines.

The U.S. Supreme Court justices ruled on an Alabama realty case in late June, declaring, "the CDC exceeded its existing statutory authority by issuing a nationwide eviction moratorium." And the Department of Education appears poised to relaunch the student loan system on October 1 despite assistant groups testifying to Congress that the result will be "chaos."

Last month, two major student loan servicers—FedLoan Servicing and Granite State Management & Resources—dropped a bombshell announcement on the Department of Education that they were withdrawing entirely from servicing their 10 million borrower accounts.

Persis Yu, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, told a Senate committee last week there will be "cataclysmic consequences" for borrowers due to the added complexity of the system set to relaunch October 1. On Tuesday, the Senate Judiciary Committee is set to hold a hearing on student loan bankruptcy reform amid rapidly expanding calls to overhaul the $1.7 trillion owed by Americans who sought higher education.

The U.S. Department of Education has canceled over $1.5 billion worth of student loan debt for nearly 92,000 borrowers under the Biden administration, particularly among borrowers who can show they were misled by colleges about the value of their degrees. About 1.2 million households reported they are very likely to face eviction in the next 60 days, according to the recent Census Household Pulse Survey.

But this hasn't stopped a flood of criticism from moderate and progressive Democrats.

"Just as cases are rising again, the eviction moratorium is ending. The student loan payment moratorium is ending. Cancel student debt, invest in affordable housing. This crisis is preventable," Omar tweeted Sunday.

Newsweek reached out to the White House and the Department of Education for additional remarks Monday afternoon.

schumer warren student loan debt
Top Democrats and left-leaning allies are urging the Biden administration to push back the imminent restart of student loan payments and evictions for tens of millions of Americans. Above, Senate Majority Leader Chuck Schumer speaks during a press conference about student debt outside the U.S. Capitol on February 4, 2021, in Washington, D.C., with (from left) Representative Mondaire Jones (D-N.Y.), Representative Alma Adams (D-N.C.), Representative Ilhan Omar (D-Minn.), Senator Elizabeth Warren (D-Mass.) and Representative Ayanna Pressley (D-Mass.). DREW ANGERER / Staff/Getty Images