President Biden is planning to extend the federal freeze on student loan payments, pushing it through the end of August, according to administration officials.
The move is welcome news for borrowers who were set to have their payments kick in again next month. But Mr. Biden is facing increasing pressure from many party faithful to wipe away student debt altogether.
“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,” Rep. Alexandria Ocasio-Cortez said in response to the pause. “It doesn’t have the effect people think it does.”
The New York Democrat said: “We should cancel them.”
That was the thrust of the argument activists made when they converged on Washington this week for a “Pick Up the Pen, Joe” day of action to cancel student debt.
Meanwhile, close to 100 Democrats on Capitol Hill, including Senate Majority Leader Charles S. Schumer, fired off a letter last week to Mr. Biden urging him to extend the pause through the end of the year and to “provide meaningful student debt cancellation.”
“Canceling a meaningful amount of student debt will provide long-term benefits to individuals and the economy, helping families buy their first homes, open a small business, or invest in their retirement,” the letter read. “More broadly, canceling student debt would add tens of billions of dollars in GDP growth.”
Mr. Schumer has said Mr. Biden could make student debt go away “with the flick of a pen.”
Eliminating all student debt carries an estimated price tag of $1.6 trillion. Forgiving up to $50,000 per borrower would cost an estimated $1 trillion.
More than 40 million Americans are carrying student loan debt. The average student loan debt is about $30,000.
The push to wipe it all away gained momentum in the 2020 Democratic presidential race.
Sens. Bernard Sanders of Vermont and Elizabeth Warren of Massachusetts popularized the push. Mr. Biden offered a less robust vision that would cancel the undergraduate federal student loan debt for borrowers with incomes under $125,000 per year who attended public institutions or historically black colleges and universities. He also pledged to eliminate $10,000 in student loan debt per borrower.
The coronavirus relief package that passed Congress in 2020 suspended loan payments, eliminated interest rates and stopped collections on defaulted loans. The latest move marks the fifth time the program has been extended.
Republicans, in general, oppose the idea, making it unlikely that legislation could survive Congress.
As a result, Democrats and activists have urged Mr. Biden to cancel student debt through an executive order.
Mark Kantrowitz, a higher education expert, has warned that Mr. Biden does not have the legal authority to forgive student loans with the stroke of a pen.
Mr. Kantrowitz, however, has said there is a way for the Secretary of Education to implement broad student loan forgiveness through a regulatory change. He said the Department of Education has been granted regulatory authority through income-driven repayment plans.
Democrats are now calling on Mr. Biden to act, warning the party will pay the price in the midterm elections if he leaves too many campaign promises unfulfilled.
“Student debt relief could be the deciding issue for Democratic voters in November,” Ms. Warren said in a recent social media post.
Speaking at the rally this week, India Walton, a former Buffalo mayoral candidate, said that activists have “waited long enough” for the federal government to forgive student debt.
“We have to continue to fight, we have to continue to compel Joe Biden to pick up the pen, cancel the debt, not $10,000, no $50,000 - all of it,” Ms. Walton said. “Do it now. If you want to stimulate the economy. If you really are invested in racial, social and economic justice you can do it now. Why wait?”
• This story is based in part on wire-service reports.
• Seth McLaughlin can be reached at smclaughlin@washingtontimes.com.
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