President Joe Biden has done it again, and Democrats will be as joyous as ever.
According to CNBC, Biden has extended the pause on federal student loan payments through Jan. 31, 2022, on the heels of polls that indicate a majority of student borrowers are not ready to resume making payments on their loans.
A “smooth pathway back”
Federal student loan payments have been on hold now for over a year, as a measure of COVID-19 pandemic relief. However, the hold was set to soon expire with payments set to resume on Sept. 30th.
Now, federal student loan borrowers will get an extra, four-month-long break from making their student loan payments.
“As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment,” U.S. Department of Education Secretary Miguel Cardona said.
In 2020, Congress, as a result of the surging COVID-19 pandemic, put a hold on federal student loan payments. The hold began in March, and it was subsequently extended by former President Donald Trump and later, President Biden.
For 16 months, not only have federal student loan borrowers been free from making payments, but in addition, their accounts haven’t accrued interest. Also, many are still receiving credit toward loan forgiveness — that is, having their loans canceled after 10 years of payments and work in the public sector — despite the fact that they aren’t making payments on those loans.
Not all student loan borrowers, though, have been as fortunate. Many students have private loans that are not covered by the relief measures, including some federal loan programs.
Canceling student debt?
President Biden, thus far, has not followed through with his campaign promise to cancel federal student loan debt, as many in his party — especially the progressive wing — would love to see him do.
It’s not surprising that he has resisted the progressive Democrats’ calls to cancel up to $50,000 for each federal student loan borrower. Generally speaking, Biden has always been against the idea.
However, what is surprising is that Biden has not yet pursued his own plan offered in compromise, which includes the cancellation of roughly $10,000 of debt for each federal student loan borrower.
Instead, at least for the time being, Biden has settled for asking his education secretary to write a memo discussing the federal government’s legal authority to cancel federal loan debt. The memo has yet to be submitted.