Biden Extends the Student Loan Pause
For months, US president Joe Biden has faced pressure from his democratic supporters to cancel student loan debt.Thank you for reading this post, don't forget to subscribe!
Proponents for canceling student loans entirely point towards growing wealth inequality and the pandemic-induced economic downturn as disproportionately impacting student loan borrowers. They say canceling student debt would help many gain economic stability, giving them a chance at a better, more equitable life.
While Biden has been hesitant to cancel student loan debt, he has extended the pause on student loans initially implemented by the Trump administration at the onset of the Pandemic.
And now, Biden has again extended the moratorium on collecting student loan debt.
The Moratorium is Extended Once Again
Biden has announced that student loan collection will remain paused through August 31. This extension marks the seventh time the moratorium has been extended since its initial onset.
This announcement has long been anticipated. Many had speculated that the Biden administration would extend the pause further, as they had instructed collectors not to communicate with borrowers.
Since loan collectors are legally required to communicate with borrowers prior to resuming payments, this essentially made another loan pause inevitable. Still, the official announcement was necessary to keep the pause in place.
How is the Pause Being Received?
While the pause is inevitably helpful to the millions of Americans with student loan debt, it’s still not the answer many were hoping for.
Biden ran on a campaign promise of canceling student loan debt, something that younger progressives deeply support. But since taking office, Biden has been deeply elusive about the progress being made on that promise.
The pause on loans leaves student loan borrowers in a state of uncertainty yet again. Many see it as a bandaid solution, one that can easily evaporate, leaving the underlying problem completely unaddressed.
Likewise, many Democratic lawmakers are unsatisfied with the extension. They continue to push the president to cancel student debt instead of simply pushing back payments.
The majority of progressive Democrats are pushing for at least $50,000 in debt canceled per borrower, stating that anything less than this won’t solve the wealth gap and will keep poorer Americans from having equal opportunity.
The idea is that by canceling student loan debt, many people would be able to start their own businesses, taking advantage of modern technology to engage in digital entrepreneurship or start online businesses.
On the other side of the aisle, Republicans are pushing Biden to resume payments. Conservatives say that the extension is allowing people to avoid responsibility for loans they willingly signed for.
What Comes Next?
No one is quite certain what the president will do next.
While the loan collection pause has been extended through August, many have noted that if the president allows loan collection to resume, that could significantly impact the elections that will immediately follow.
This makes it very likely that loans will, at the very least, face another extension on their collection.
Ultimately, only time will tell what will happen with student loan collection.