President Joe Biden announced Wednesday that his administration will extend the pause on repayment for federal student loans through August 31, 2022.
Student loans issued and owned by the Department of Education have been in deferment with no interest accrual since March 2022, when President Donald Trump's CARES Act authorized the Department of Education to prevent collecting repayment because the economy closed in reaction towards the coronavirus.
Since then, every single deadline has been extended. Federal student loan repayment was initially slated to resume in Sept. 2022, but that August, Trump extended the government education loan repayment moratorium to Dec. 31, 2022, after which to Jan. 31, 2022.
Upon assuming office, Biden extended the repayment moratorium to Sept. 2022. On Aug. 6, 2022, Biden announced that he was extending a student loan repayment moratorium to Jan. 31, 2022. On Dec. 22, 2022, Biden extended the moratorium to May 1, 2022. In his statement, the president asked borrowers to \”do their part as well\” and \”take full advantage of the Department of Education's resources to help you prepare for payments to resume.\”
Today, the deadline has been pushed back, yet again, to August 31, 2022. \”This continued pause will help Americans breathe a little easier once we recover and rebuild in the pandemic,\” Biden said.
Prominent Democratic activists and politicians want to reduce or outright cancel education loan debt rather than simply defer payments.
\”Student loan debts are holding back tens of millions of people across this country who can't buy homes, buy cars, or start small businesses. President Biden needs to #CancelStudentDebt not only for those people individually but also for our whole economy.\” Senator Customer advocates tweeted in June 2022.
Rep. Troy Carter (D -La.) introduced the Student Loan Relief Act in August 2022, which may have forgiven up to $50,000 in federal student education loans.
\”It's Congress' job to enhance the lives from the American people,\” Carter said based on a press release. \”Easing the large burden of student education loans for that countless Americans, young and old, saddled with debts are certainly one of my highest priorities in Congress. This legislation will do just that.\”
Biden has shown unwilling to enact wide-scale student loan relief, saying that it might be a giveaway towards the most privileged Americans.
\”The concept that … I will forgive your debt, the vast amounts of dollars indebted, for people who have attended Harvard and Yale and Penn …\” President Biden said in a town hall hosted by CNN journalist Anderson Cooper in Feb. 2022. Yet some graduates of elite schools are experiencing federal education loan debt forgiveness, as are former attendees of dis-accredited and closed for-profit schools.
Critics of universal federal student debt relief argue that it will be a regressive giveaway towards the wealthiest Americans. Borrowers with four-year degrees earn more money than people who only have high school diplomas, people with graduate degrees make more than individuals with four-year degrees, etc., etc. Because a lot student loan debt belongs to borrowers who tried on the extender to increase their earning potential, noted the Brookings Institute's Adam Looney in a comprehensive report, the responsibility of loan debt ought to be measured against future earnings.
\”Excluding the value of education from the calculation of net worth while including debt accustomed to finance that education is much like measuring a homeowner's wealth by subtracting their mortgage but ignoring the need for the home itself. You'd find that homeowners were poorer than renters, which people living in mansions were the poorest members of society.\”
