White House set to extend student loan payment break
The department and the White House declined to comment on Tuesday.
The Department of Education was due to resume payments in May, two years after the moratorium was introduced in response to the economic upheaval caused by the pandemic. The widely anticipated extension means that some 41 million people will continue to go the next few months without interest on their debt and with more time to save money.
If the administration lands an August extension, it would be much shorter than what congressional Democrats want. Liberal leaders have urged the administration to extend the pause until at least the end of the year, arguing that resuming payments would financially destabilize many borrowers who are not ready to take on another bill amid the surge. food and gas costs. Some are pressuring Biden to forgive some of the $1.7 trillion in outstanding student debt through executive action.
“Extending the moratorium is not enough. We need to cancel student debt,” said Rep. Ro Khanna (D-California). “There is no constitutional difference between forgiveness of interest and forgiveness of the student loan itself.”
Senator Patty Murray urges Biden administration to extend pause on student loan repayments until 2023
Although the president has indicated he is open to legislative proposals on debt cancellation, he has focused on targeted relief, providing about $16 billion in loan forgiveness to more than 680,000 borrowers who meet certain criteria, such as being defrauded by their colleges.
“Frankly, four months isn’t enough to fix a system that’s been broken for decades,” Abby Shafroth, acting director of the National Consumer Law Center’s Student Loan Borrower Assistance Project. “The Biden administration has begun working on important systems reforms, but those solutions are still being worked out and won’t be ready for implementation by August.”
News of the impending extension rocked Republicans, who opposed the move as an unnecessary giveaway at a time when President Biden says the economy is on solid footing.
Representative Virginia Foxx (NC), the top Republican on the House Education and Labor Committee, called the impending extension “outrageous.”
“Taxpayers have been footing the student loan bill for graduate students and Ivy League attorneys to the tune of $5 billion each month as their wallets are emptied by soaring inflation,” said Foxx in a statement Tuesday. “The arrogance of this administration is astonishing. It’s not about the pandemic…it’s about setting the stage for a general loan forgiveness.
The White House had reported that another expansion was in the works. During an appearance on the “Pod Save America” podcast in early March, White House Chief of Staff Ron Klain noted the president would decide whether to use his executive power to cancel student debt “before the break expires, or he would extend the break.” Days later, the Department of Education told student loan managers who manage its portfolio to drop sending notices to borrowers about the May takeover.