The student-loan payment pause should be extended until 2023 to fix the 'broken' system, a top senator says: 'It is ruining lives and holding people back'

• Senate education Chair Patty Murray called on Biden to extend the student-loan payment pause to 2023.
• She said that borrowers cannot resume payments until the "broken" loan system is fixed.
• Some of those suggested fixes included some loan forgiveness and easing access to repayment plans.

A top Democratic senator wants President Joe Biden to extend the pause on student-loan payments until at least next year. 

"When I talk to student loan borrowers in Washington state, one thing is painfully clear: the student loan system is broken," Chair of the Senate Health, Education, Labor, and Pensions Committee Patty Murray said in a statement. "It is ruining lives and holding people back. Borrowers are struggling with rising costs, struggling to get their feet back under them after public health and economic crises, and struggling with a broken student loan system—and all this is felt especially hard by borrowers of color."

That's why she wants Biden to take the time to "permanently fix" the system.

The pause on student-loan payments, with waived interest, has been in effect for over two years as part of Biden and former President Donald Trump's pandemic relief measures. Biden recently extended that pause for a third time, through May 1. As that date is quickly approaching, lawmakers like Murray are concerned that most of the 43 million federal borrowers will not be financially prepared to foot another monthly bill. 

To ensure the student-loan system is working in the best interest of borrowers, Murray suggested four reforms Biden should implement:

1. Give borrowers a fresh start by placing those who were in default back in good standing on their credit reports;
2. Make income-driven repayment plans easier to access and cap monthly payments at no more than 10% of discretionary income;
3. Extend the deadline for the Public Service Loan Forgiveness (PSLF) waiver that allows prior ineligible payments to count toward loan forgiveness;
4. And forgive some student debt for all borrowers "while prioritizing those struggling the most."

As of now, it's unclear what timeline for repayment Biden's administration is considering. Two weeks ago, White House Chief of Staff Ron Klain suggested to Pod Save America that federal borrowers are on the hook for relief in some form before the expected May 1 payment restart date.

"The President is going to look at what we should do on student debt before the pause expires, or he'll extend the pause," Klain said, adding that "the question whether or not there's some executive action on student debt forgiveness when payments resume is a decision we're going to take before payments resume."

More recently, the Education Department dropped a fresh hint that another payment pause extension could be in the cards: it asked student-loan companies to halt sending notices to borrowers about payments resuming, which is something a loan company would typically do leading up to a payment restart date.

What's clear to Murray is that payments cannot resume until Biden corrects the student-loan "policy failure that has financial consequences."

"This loan system is unacceptable and we can fix it," she said. "When you get a loan to afford higher education, you deserve a system that works. It should be easy to enroll in a sensible repayment plan, no one should end up with a monthly payment they can't afford, and debt relief shouldn't require making it through a gauntlet of paperwork. This is not too much to ask—so until we fix our student loan system, the student loan payment pause must continue to provide borrowers much-needed relief."