Tax groups urge Biden administration to end pause on student loan payments

A coalition of conservative organizations and nonpartisan advocacy groups wrote to the Department of Education on Tuesday urging the Biden administration to end the moratorium on federal student loan payments.

A dozen organizations signed onto the letter, which was first obtained by The Hill, arguing the moratorium unfairly burdens taxpayers and contributes to out-of-control government spending.

“This policy is fundamentally unfair. A moratorium on student loan payments is unfair to blue-collared Americans who did not rack up tens of thousands of dollars of debt and those who proactively paid off their debt,” the letter states. “Many Americans pursued other opportunities instead of going into debt for an expensive four-year degree, such as less expensive schooling, serving in the military to receive education assistance, or working long hours to put themselves through school.”

The letter was led by Americans for Tax Reform, a conservative group that opposes tax increases, and signed by 11 other groups that include the Koch brothers-backed Americans for Prosperity, FreedomWorks, Heritage Action for America, the National Taxpayers Union, Consumer Action for a Strong Economy and the 60 Plus Association.

The organizations argue the moratorium actually benefits higher-income individuals, citing a Committee for a Responsible Federal Budget study that found roughly 75 percent of student loan repayments come from the top 40 percent of earners.

The groups further argued the moratorium on loan repayments has contributed to high government spending at a time when the national debt is already spiraling, with billions of dollars in student loans going uncollected by the federal government.

“This policy is one example of many handouts, subsidies, and payment pauses through which the federal government floods the economy with so much money that demand is growing too fast for production to keep up,” the letter states, pointing to record-high inflation in recent months.

“We urge you to resume federal student loan payments. The student loan moratorium is not only regressive and unfair, but it has exacerbated America’s inflation problem and contributed to historic, out-of-control spending.”

Former President Trump originally signed a moratorium on student loan payments in March 2020 as the coronavirus pandemic was wreaking havoc on the economy. The moratorium has been extended multiple times, most recently in December when President Biden left it in place until May 1.

Progressive Democrats have pushed for the Biden administration to cancel student debt for millions of students, arguing it would be a boon to the economy and level the playing field for low-income individuals who are struggling to pay back loans.

While the White House has indicated it does not intend to completely cancel student debt without a bill from Congress, officials have hinted they may extend the moratorium once again before it expires.

“The president is going to look at what we should do on student debt before the pause expires, or he’ll extend the pause,” White House chief of staff Ron Klain said on a recent episode of the podcast “Pod Save America.”