President Biden on Wednesday announced he is extending the pause on student loan payments through the end of August.
Mr. Biden said it is too much to ask borrowers to restart paying their loans when the nation is emerging from the coronavirus pandemic.
“If loan payments were to resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship, and delinquencies and defaults could threaten Americans’ financial stability,” Mr. Biden said in a statement. “Accordingly, to enable Americans to continue to get back on their feet after two of the hardest years this nation has ever faced, my administration is extending the pause on federal student loan repayments through August 31st, 2022.”
“That additional time will assist borrowers in achieving greater financial security and support the Department of Education’s efforts to continue improving student loan programs,” Mr. Biden said.
Before the announcement, the repayment schedule was set to kick back in on May 1.
The move was applauded by Democrats on Capitol Hill, where liberals had been lobbying Mr. Biden heavily on the extension.
Senate Majority Leader Charles E. Schumer of New York, Sen. Elizabeth Warren of Massachusetts and Rep. Ayanna Pressley of Massachusetts issued a statement along with five of their congressional colleagues urging Mr. Biden to go further.
“Since the start of the Biden-Harris administration, no American has had to pay a dime on their federally-held student debt, and more than 700,000 borrowers have had over $16 billion in student debt cancelled,” they said in a statement, which was co-signed by House Majority Whip James E. Clyburn. “While the extension is welcome, a looming restart of student loan payments in September underscores the importance of swift executive action on meaningful student debt cancellation.”
“We continue to implore the president to use his clear legal authority to cancel student debt, which will help narrow the racial wealth gap, boost our economic recovery, and demonstrate that this government is fighting for the people,” they said.
Rep. Bobby Scott, chair of the Education and Labor committee, said the “Biden-Harris administration has demonstrated that it remains committed to helping borrowers get back on their feet.”
“The extension also has the added benefit of providing the Administration more time to offer impacted borrowers in Income Driven Repayment plans a solution without actively collecting on student loans,” he said.
But the move has already been panned by federal budget deficit hawks.
“If the administration is serious about reducing the deficit, fighting inflation, and asking for more from the rich, they have a funny way of showing it,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement ahead of Mr. Biden’s announcement. “Extending the debt pause would be a massive handout to doctors and lawyers that would only feed more inflation and worsen the nation’s balance sheet.”
Ms. MacGuineas said there was “absolutely no justification” for the payment pause extension.
“The unemployment rate among college graduates with a bachelor’s degree is 2% — which is in line with pre-pandemic levels and about as low as any time in the past two decades,” she said.
• Seth McLaughlin can be reached at smclaughlin@washingtontimes.com.
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