The Biden Administration could announce an extension to its student loan debt moratorium as early as this week, granting a reprieve to the 43.4 million borrowers who would otherwise be required to begin repayments May 1, according to the Politico, the Hill and the Wall Street Journalwhich cited unnamed sources.
Administration officials are weighing extending the moratorium on federal student loan debt collections and interest accrual until August, Politico reported, a move possibly foreshadowed by the Department of Education’s March request that loan officers not remind borrowers about the upcoming deadline.
Democratic lawmakers have urged the administration to continue the moratorium, though a three-month extension would fall short of Sens. Elizabeth Warren (D-Mass.) and Chuck Schumer’s (DN.Y.) request to cancel up to $50,000 in debt per borrower , or President Joe Biden’s own campaign promise to cancel $10,000 in debt per borrower.
A decision on student loan payments will be made by May, and will “factor the impacts of economic data on ranges of groups of people, including students,” White House press secretary Jen Psaki said Friday.
the Wall Street Journal said that an announcement could come as soon as Wednesday, earlier than indicated by Politico or the Hill.
The White House did not immediately respond to a request for comment.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law by President Donald Trump in March 2020, paused payments and interest accrual on federal student loans. Since then, the moratorium has been extended repeatedly, a decision lauded by teachers’ groups, borrower advocacy groups and other civil rights groups, but criticized by some Republican lawmakers, such as Rep. Jim Banks (R-Ind.), who claimed that the Biden Administration was “using COVID as a never-ending excuse to expand its power, waste taxpayer dollars and further fuel inflation.” Though Biden has overseen the cancellation of $16 billion in student loan debt so far, he has declined to address whether he plans to make good on his campaign promise of forgiving $10,000 in debt per borrower. Legal experts have debated whether statutes like the Higher Education Act would give Biden the power to accomplish sweeping student debt cancellations without Congress’s say-so.
$30,030. That’s how much the average public university student borrows in the course of getting a bachelor’s degree, according to an analysis of Federal Student Aid data by research group the Education Data Initiative.
“We’re 30 days out—this is ridiculous,” Natalia Abrams, executive director for the Student Debt Crisis Center, a nonprofit, told the New York Times. “Borrowers are checking the news every day so they can plan their lives.”
Canceling student loan debt before May 1 would cause inflation to leap up to 20% above the median Federal Reserve forecast in the ensuing 12 months, argues the Committee for a Responsible Federal Budget, a nonpartisan public policy think tank. Additionally, student loan cancellation might lead future students to expect their own debts to be expunged, encourage them to take on more debt and enabling schools to raise tuition, the committee said.
“5 Reasons Why Biden May Actually Extend The Student Loan Pause Again” (Forbes)
“Biden May Extend The Student Loan Payment Pause, But These Republicans Want To End Student Loan Relief Now” (Forbes)