With payments suspended again, will student loan debt ever be canceled?


President Joe Biden visits the Oval Office upon his return to the White House on December 20, 2021.

Kevin Lamarque | Reuters

When Scott Heins learned that the Biden administration was giving student loan borrowers an additional three months before they had to start making payments again, he had mixed feelings.

On the one hand, the freelance photographer from Brooklyn, New York, isn’t sure how the fast-spreading omicron variant of Covid-19 will affect his work, and so getting a little more time is a relief. More than a decade after graduating from college, he still owes more than $ 20,000.

Yet the repeated extensions are just a kind of one-off treatment for a national crisis, Heins said. A year after Joe Biden began his presidency, Heins is disappointed that the CEO has not decided to write off student debt. During the election campaign, Biden promised to write off at least $ 10,000 per borrower.

“I don’t see student loan debt as something that there is a way out or around,” said Heins, 33. “My goal is to find out what our political leaders are going to do. “

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When the pandemic first hit the country in March 2020, the United States Department of Education announced it was offering millions of Americans in debt to students the opportunity to hit the pause button on their student repayments. loan without accrued interest. Research shows that almost all borrowers have accepted.

That relief was only supposed to last six months, but almost two years later, and after five more extensions, including three under Biden, the break is still in effect. More recently, the White House announced it was pushing the break until May.

“We know that millions of student loan borrowers are still facing the impacts of the pandemic and need more time before they resume payments,” Biden said in a Dec. 22 statement.

But the fact that so many borrowers say they’re still not ready to restart their payments should signal the administration that stronger action is needed, advocates say, and that student loans have only become a greater burden on Americans than ever before.

Before the public health crisis, outstanding student loans exceeded $ 1.7 trillion, exceeding credit card and car debt. The average monthly bill was around $ 400, and nearly one in four borrowers were either in default or in default on their student loans.

“Why start the payments again?” ” Katrina vanden Heuvel, a Washington Post columnist recently asked. She went on to say that much of Biden’s program is at risk, including the derailment of the Build Back Better spending bill, and that the loan cancellation is something he could do without Congress. .

“Biden should act now,” Vanden Heuvel said. “Canceling student debt is as strategically smart as it is morally urgent. “

Senate Majority Leader Chuck Schumer, DN.Y., and other Democrats also recently reiterated their call for the president to write off the debt.

Criticisms of a student debt jubilee say that it would be unfair to those who have not borrowed or repaid their loans and would not want to significantly boost the economy because college graduates tend to earn more money and are more likely to reallocate their monthly bill to savings rather than spending more.

Biden also called student loan borrowers more affluent than other Americans.

In an interview with New York Times columnist David Brooks in May, Biden noted “the idea that you go to Penn [State] and you pay a total of $ 70,000 per year and the public should pay for it? I do not agree.” Later in a CNN town hallhe said it made no sense to cancel loans “for people who went to Harvard, Yale and Penn”.

Advocates point out that it is largely a myth that people with student debt – especially those struggling with them – have the benefit of a prestigious education behind them. Indeed, less than 1% of borrowers attended an Ivy League college.

Biden called on the Department of Education and the US Department of Justice to review his legal authority to authorize loans without Congress. The results have not yet been made public.

In the meantime, many borrowers are probably getting impatient.

“Disappointment with the lack of movement on blanket student loan cancellations could hurt Democrats’ prospects for the midterm election unless they act,” the expert said. higher education Mark Kantrowitz.


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