Biden Extends Student Loan Payment Pause Until End of August
As expected, President Joe Biden has officially extended the student loan payment moratorium until Aug. 31, claiming the extension “will help Americans breathe a little easier as we recover and rebuild a little from the pandemic.”
In response to the COVID-19 pandemic, most federal student loans (and attached zero-rate interest rates) have been paused since March 2020. But after a series of federal student loan payment pauses by President Biden and former President Trump, advocates were calling for more than short-term solutions.
Many Democrats — and other loan forgiveness supporters — have been pressuring the president to extend the payment moratorium until the end of the year at least, as well as to build an unprecedented system of loan forgiveness.
As a presidential candidate, Joe Biden campaigned on canceling $10,000 worth of student loan debt per borrower. Now, more than a year into his term, the president has yet to find a way to deliver on his campaign promise — and has so far relied on a series of payment pauses and extensions. While significant student loan relief has been granted to more than 700,000 people (of a value of at least $17 billion), many claim more effort is needed.
Rep. Alexandria Ocasio-Cortez (D-N.Y.) has been a vocal proponent of canceling student loan debt. Taking to Twitter yesterday, the New York Democrat said, “I think some folks read these extensions as savvy politics, but 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.”
Today’s announcement (and Biden’s loan forgiveness actions thus far, more broadly) have had plenty of opponents. Private lending companies are arguing that inflation, already at a near-critical level, would be intensified by further extensions — and that this ongoing payment pause is a needless subsidy to many wealthy and high-earning borrowers, who simply don’t need it.
Republicans in Congress have echoed this sentiment and have called for student loan payments to resume immediately. Senator Tom Cotton (R-Ark.) blasted Biden’s extension decision, saying the president’s “perpetual student loan payment moratorium is an insult to every American who responsibly paid debts. There’s no free lunch: this reckless move puts taxpayers on the hook for billions.”