Biden could extend student loan suspension and plans to forgo loans, White House official says

A senior White House official suggested this week that President Biden is considering a further extension of the ongoing pause on student loan repayments, and that student loan forgiveness is still on the table.

“The president is going to look at what we should do on student debt before the pause expires, or he will extend the pause,” White House Chief of Staff Ronald Klain said in an interview. job by Pod Save America on Thursday. “Whether or not there is executive action [on] canceling student debt when payments resume is a decision we will make before payments resume.

Student loan payment break set to expire in May – but could be extended

Most federal student loan payments have been suspended since the CARES Act was passed in March 2020. This legislation also froze accrued interest on federal student loans held by the government and suspended collection efforts against borrowers in fault. The relief was originally meant to last just six months, but was later extended several times – first by President Trump and then by President Biden.

The Biden administration had called last year’s extension to January 2022 the “final” extension of the student loan payment pause. But following the rapid spread of the Omicron variant Covid-19 and rising inflation, Biden again extended the pause until May 1. Education Ministry officials, while not expressly ruling out a further extension, said borrowers should prepare for repayment to resume this May.

But Klain’s comments this week suggest the Biden administration is considering another extension. There could be several reasons for this, including ongoing inflation (which can only get worse in light of the current turmoil in Europe). Many student borrowers may also not be ready to resume repayment in the spring; a poll released in February by the Student Borrower Protection Center and Data For Progress found that nearly four in ten respondents were not confident they could start paying their loans again.

In addition, a recent report by the Government Accountability Office (GAO) indicated that borrowers may experience problems resuming repayment as the Department encounters difficulty in communicating with borrowers after such a long hiatus – a problem compounded by the fact that the Federal Student Loans Service system has undergone significant change as major contractors are opting out of the federal student aid system.

Student loan forgiveness is not out of place

Klain’s comments suggest President Biden could consider using executive action to write off at least some amount of borrowers’ student debt — a potentially significant development.

Biden said he would support broad student loan forgiveness during his presidential campaign, and he said he favors moves to forgive $10,000 in student loans for borrowers. He also supported targeted relief for undergraduate borrowers who attended public institutions and HBCUs, and borrowers dedicated to careers in public service. But Biden has since voiced opposition to larger amounts of student loan forgiveness, such as $50,000 or more, which has been suggested by leading congressional Democrats and advocacy organizations.

White House officials have repeatedly said that Biden would gladly sign a student loan forgiveness bill if Congress passes such legislation. But there are no signs of that happening, and Congress introduced no such bills last year. Biden did not push Congress to pass a student loan forgiveness bill during his State of the Union address earlier this week.

If Congress does not pass the bill, the only mechanism to enact broad student loan forgiveness would be executive action. Advocates for student borrowers, including consumer advocacy organizations, student loan legal experts and progressive lawmakers, have argued that existing federal law gives Biden clear legal authority — especially in cases of national emergency – to cancel federal student loan debt. But other jurists and some former Education Ministry officials disagreed with that assessment. Such legal authority has never been used on a large scale before, and it has not been tested in federal court.

Advocates for student loan borrowers express cautious optimism

Student loan advocacy groups were quick to elevate Klain’s comments and expressed hope that Biden could soon take action on student loan debt.

“We have 59 days before millions of people are pushed over a financial cliff by student loans,” the Student Debt Crisis Center said in a statement. Tweeter. “We hope [White House Chief of Staff Ronald Klain] and others in the administration encourage @POTUS do the right thing and #cancelstudentdebt.”

“The answer is to cancel student debt. And now,” tweeted the Debt Collective, a syndicate of debtors that defends student borrowers.

Meanwhile, members of Congress continued to urge Biden to act. “Today would be a great day to write off at least $50,000 in student debt per borrower,” tweeted Rep. Pramila Jayapal (D-WA), chair of the House Progressive Caucus.

Further Reading on Student Loans

Student loan forgiveness denied? Biden administration unveils appeals process

Thousands of Jobs Qualify for Expanded Student Loan Forgiveness Program

Biden’s student loan forgiveness now tops $16 billion after fresh wave of approvals

One Million Borrowers Could Get Expanded Student Loan Forgiveness Starting This Month, Biden Official Says

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