Biden extends student loan payment suspension, clears default status for millions
On Wednesday, President Joe Biden formally announced that his administration would extend the student loan payment pause and clear the default status of millions of borrowers so they can get a “fresh start” when payments finally resume.
The administration will extend the hiatus until the end of August, Biden announced. “I know people have been hit hard by this pandemic. And although we have come a long way in the past year, we are still recovering from the economic crisis it caused,” he said. “This continued pause will help Americans breathe a little easier as we recover and rebuild from the pandemic.”
The Ministry of Education has announced that it will also be get borrowers out of default, which could alleviate financial burdens and uncertainty for millions of people. There is currently more than 7 million student borrowers in default, according to agency data.
Progressive legislators had previously advocated for the elimination of default status for those borrowers, saying the move was one step Biden could take to relieve the pressure and confusion of those in debt. They noted that the Department of Education could legally do so because of the debt relief provisions of the CARES Act.
But the ultimate goal of progressives is for Biden to cancel student debt — preferably all of it, some lawmakers and advocates say.
Biden’s announcement sparked an explosion of calls for him to cancel student debt. During the election campaign, he promised to cancel $10,000 in loans for each borrower, but he refused to follow through on this commitment for a year after his presidency, despite warnings from lawmakers and progressive advocates that his failure to do so will undermine the Democrats’ chances of winning congressional seats this fall.
“With costs rising, the last thing workers need right now is another expensive monthly payment. Now is the time to finish the job and cancel student debt,” the Congressional Progressive Caucus said. wrote on Twitter. Lawmakers noted that student debt disproportionately affects blacks and browns and is also a huge burden on older people.
Sen. Elizabeth Warren (D-Massachusetts), the congressional leader on the student debt issue, welcomed the extension but called on the president to do more. Warren previously urged Biden to forgive up to $50,000 of debt per borrower, noting that broad economic impacts that borrowers bear under the burden of student loans.
“Last week, my colleagues and I led nearly 100 members of Congress urging [President Biden] to extend the federal student loan payment pause and today the president answered our calls,” she said. “This extension is essential, but now is the time for the president to use his authority to #CancelStudentDebt.”
Many debt advocates posted a 2020 tweet from Biden’s official campaign account saying he would forgive a minimum of $10,000 in student debt if elected.
I am okay, @POTUS. https://t.co/YhUopYFjYW
— Mondaire Jones (@MondaireJones) April 6, 2022
The Debt Collective, which has advocated for Biden to eliminate student debt, said extending the break is just a band-aid for the problem, which will still arise until student debt is cancelled. On Monday, the group gathered outside the Department of Education to encourage Biden to sign an executive order cancellation of all federal student debt.
“Now millions of families will be able to keep billions of dollars in their pockets – a testament to the collective power of debtors,” says Braxton Brewington, spokesperson for Collectif Dette. “But instead of pausing on the student debt crisis every few months — kicking the streets — President Biden should actually solve the crisis by taking up his pen and canceling student debt.”