President Joe Biden plans to extend the moratorium on federal student loan payments through Aug. 31. For tens of millions of Americans, this means a much-needed breather, though it will only last momentarily.
This is the fifth extension since the pause took effect in March 2020. This time, inflation is climbing alongside gas prices thanks to the unlawful Russian invasion of Ukraine. At the same time, American student debt has continued to grow past its staggering $1.3 trillion portfolio of misery.
The freeze will save 41 million borrowers roughly $5 billion a month, according to the Education Department.
While it’s still a break, this moratorium has also grown an increasing frustration among those with student debt, who are in a state of financial limbo – a dangerous place to be amidst a global pandemic.
Both conservative and liberal politicians are expected to further criticize the Biden administration’s actions and plans. Some Democratic lawmakers, including Senate Majority Leader Chuck Schumer and Sen. Elizabeth Warren of Massachusetts, have been attempting to pressure Biden into using his executive authority to cancel up to $50,000 in student loan debt per borrower.
In fact, as recently as last week, dozens of Democratic lawmakers sent President Biden a letter, urging him to extend the pause through the year’s end and “to provide meaningful student debt cancellation,” something Biden has both promised on the campaign trail and, confusingly, publicly stated that such action must come from Congress rather than the executive branch.
In contrast to Democratic lawmakers, conservative advocacy groups, led by Grover Norquist’s Americans for Tax Reform, say the moratorium has already been too generous to student debt borrowers at the expense of those without higher education. They sent a letter on March 8 to Education Secretary Miguel Cardona urging him to restart payments as a way to address the national deficit and fight inflation.
Not so surprisingly, borrowers are getting more insistent in their pleas to the president for widespread, effective student loan forgiveness. They claim that while the moratoriums have helped, they didn’t solve the root problem.
“The pause doesn’t change the fact that it’s still not affordable,” said Elisha DeJesus, 27, a Massachusetts therapist for children to USA Today.
Yet no matter how or when repayments restart, the government is likely to be facing an uphill battle when it comes to getting borrowers to actually resume their payments. A January report from the Government Accountability Office found nearly half of the 42.3 million borrowers covered by the freeze are at high risk for delinquency.
This group includes those who were delinquent on their loans before the pause, those who dropped out of college, and graduates from within the past few years who haven’t had to make any repayments due to the freeze.
The Education Department is still on track to cancel over $17 billion owed by borrowers since Biden took office, accomplished through extensions of existing debt forgiveness programs, such as those for borrowers with permanent disabilities or those who were defrauded by schools, as well as roughly $6.2 billion in debt carried by those in a government role.
By Ethan Hauck
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