Biden administration signals extension of student loan freeze
President Joe Biden has so far made little headway on his campaign pledge to rescind $10,000 student loans per borrower.
But it looks like his administration is preparing to take advantage of the next best option by extending the student loan payment break beyond the May 1 expiry date.
As reported by Politics, Department of Education officials have asked companies that service federal student loans to delay sending required notices to borrowers that their loan payments will resume in less than two months. This would apparently indicate that another break in loan repayments is coming soon.
Moreover, it was only last week that White House Chief of Staff Ron Klain said another pause in payments could be on the cards and widespread loan forgiveness remains on the table. “The president is going to look at what we should do on student debt before the break expires, or he’ll extend the break,” Klain said. noted on the Pod Save America podcast.
Additionally, a coalition of left-wing groups, led by the Student Borrower Protection Center, recently wrote in a letter at the White House calling for “immediate relief”.
“Borrowers need immediate relief from the crushing burden of massive student debt as the pandemic exacerbates the financial hardships of all Americans and puts existing racial disparities in wealth and education into a particularly striking relief,” the letter read.
‘Unfair’ loan payment break
During this time, by The hilla coalition of conservative organizations and nonpartisan advocacy groups have written to the Department of Education calling on the Biden administration to end the pause on student loan repayments.
“This policy is fundamentally unfair. A student loan repayment moratorium is unfair to blue-collar Americans who haven’t racked up tens of thousands of dollars in debt and those who have proactively repaid their debt,” said the lettersigned by a dozen organizations and led by Americans for Tax Reform.
“Many Americans have pursued other opportunities instead of going into debt for an expensive four-year degree, such as cheaper tuition, serving in the military to receive educational assistance, or working long hours to go to school,” he continued.
Look at the national debt
The letter also argued that the suspension of student loans had contributed to high public spending at a time when the national debt reached record levels.
“This policy is an example of the many handouts, subsidies and payment pauses through which the federal government floods the economy with so much money that demand is growing too quickly for production to keep up,” he said.
“We urge you to resume federal student loan repayments. The student loan moratorium is not only regressive and unfair, but it has exacerbated the inflation problem in the United States and contributed to historic out-of-control spending,” he concluded.
Ethen Kim Lieser is a Washington State-based science and technology editor who has held positions at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow him or contact him on LinkedIn.