Student Debt Repayments Stay Frozen

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Student Debt Repayments Stay Frozen

Hear that noise? It’s the sound of a can being kicked down the road.

Earlier this month, President Joe Biden announced he was extending the federal student loan repayment freeze—first put in place by the Trump administration as a pandemic relief measure in March 2020—through August 31, 2022.

“We are still recovering from the pandemic and the unprecedented economic disruption it caused,” Biden said, pushing back the end of the moratorium a third time—and second time since claiming his August 2021 extension would be his “final” one. “Additional time will assist borrowers in achieving greater financial security and support the Department of Education’s efforts to continue improving student loan programs.”

About 43 million people in the U.S. have a combined total of $1.6 trillion in federal student loans, according to government estimates. But the job market has rebounded in a major way—there were more than 11 million job openings at the end of February, almost two for every unemployed worker—and COVID-19 restrictions are all but a thing of the past. Yet the Biden administration has not committed to resuming payments at the end of this latest extension. “[The moratorium] is either going to be extended or we’re going to make a decision” about canceling debt, White House press secretary Jen Psaki said on a podcast recently.

“The White House should just be honest about what they’re doing and announce they’ll turn the loan portfolio on after Election Day,” Trump-era Secretary of Education Betsy DeVos wrote.

Progressive Democrats praised the freeze extension, but argued it didn’t go far enough. “I don’t think those folks understand the panic and disorder it causes people to get so close to these deadlines just to extend the uncertainty,” Rep. Alexandria Ocasio-Cortez tweeted. “We should cancel them.” Sens. Elizabeth Warren and Bernie Sanders echoed the calls for wiping out borrowers’ debt entirely.

As a presidential candidate, Biden campaigned on forgiving “a minimum of $10,000” in student debt per borrower, and since taking office has supported legislation aimed at accomplishing that goal. But that won’t be happening in this current Congress, leading progressives and advocacy organizations to demand Biden wipe away students’ debt unilaterally with an executive order—something it’s far from clear he has the legal authority to do. Senate Majority Leader Chuck Schumer, who favors $50,000 in debt forgiveness, promised activists last week that the White House is getting closer to canceling debt on its own. “I have told the president this is one of the most important things he can do to help our economy,” Schumer said. “We want our young people to realize that they can have a good future.”

(It’s also potentially one of the most important things he can do to help Democrats’ political prospects, as Biden won about three in five college-graduate voters in 2020 as the country continued polarizing around educational attainment. He’s been bleeding support from young voters in recent months, and party strategists see student loan forgiveness as a last-ditch means of getting them back on the team before the midterms.)