Student Loans Are Set To Be Paused Once More, With Payments Deferred Until September

The White House is expected to announce the pandemic relief program’s sixth extension, which will affect tens of millions of borrowers. According to an administration official briefed on the situation, President Biden will allow millions of federal student loan borrowers to put their payments on hold until Aug. 31, the latest extension of a crisis relief package that began more than two years ago. The stoppage would be the sixth since the pandemic began, and it would come less than a month before payments were set to resume, affecting tens of millions of debtors, including 35 million who have not been making payments that would have been due.

Those debts haven’t accrued interest, and seven million defaulted borrowers have been spared wage garnishments and other collection measures. According to an administration official who was not authorised to speak about the preparations before the announcement, the extension will be revealed this week. The four-month wait means the pause will resurface before the midterm elections, and student debt activists will continue to demand that Mr. Biden eliminate at least some debt completely. Americans owe $1.6 trillion in federal student loans, which is more than they owe in car loans, credit cards, or any other type of consumer debt except mortgages.

Student loan debt is a “racial and economic justice issue that scars the soul of America,” according to Wisdom Cole, the N.A.A.C.P.’s national director of youth and college. “You create a stronger case for terminating it with each repayment extension,” Mr. Cole added. “Just cancel it at this moment.” Some members of Mr. Biden’s party share this viewpoint. Senator Chuck Schumer of New York, as well as Representative Ayanna Pressley and Senator Elizabeth Warren, both of Massachusetts, have encouraged the president to utilize executive action to wipe out up to $50,000 per borrower.

Mr. Biden, on the other hand, has resisted this method, stating that any debt reduction should be done by legislation. Supporters in Congress claim they lack the necessary votes; a measure to forgive $10,000 in debt for many debtors passed the House in 2020 as part of a pandemic relief package but died in the Senate. Nonetheless, the administration keeps dangling the threat of cancellation.

“Joe Biden, right now, is the only president in history where no one’s paid on their student loans for the entirety of his presidency,” Ron Klain, Mr. Biden’s chief of staff, said last month on a “Pod Save America” podcast. “The question of whether or not there’s some executive action on student debt forgiveness, when the payments resume, is a decision we’re going to take before the payments resume.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here