On Wednesday, the Biden administration announced that it is extending the pause on student loan payments through May 1 – a sharp reversal of its previous stance, likely due to increased pressure from debt cancellation advocates as the Omicron variant of COVID-19 sweeps the U.S.
“We know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments,” President Joe Biden said in a statement announcing the 90-day extension.
Payments were previously set to restart on February 1. When the Education Department last lengthened the payment freeze in August, the agency said that it was the “final extension.” Earlier this month, Press Secretary Jen Psaki said that “a smooth transition back into repayment is a high priority for the administration.”
Psaki’s statement sparked fury from progressive lawmakers and debt activists who have been pressuring Biden to take action on student debt relief since he took office – whether in the form of a pause extension, loan forgiveness or both.
Debt cancellation advocates celebrated the Biden administration’s move on Wednesday, and amplified their calls for further action.
“This is a major win for 45 million student debtors and their families,” Debt Collective spokesperson Braxton Brewington said in a statement. “Next, the Biden administration should permanently relieve this financial burden on families and the economy by using his executive authority to eliminate all federal student debt.”
Progressive lawmakers also celebrated the extension. “Extending the student loan payment pause is a major relief for millions of Americans during this pandemic. I appreciate everyone who organized and pushed President Biden to take action, and I’m grateful he listened to our call,” wrote Sen. Elizabeth Warren (D-Massachusetts). “Next, [Biden] should #CancelStudentDebt.”
On the campaign trail, Biden promised to cancel up to $10,000 in debt for each borrower – but even though legal experts, debt advocates and potentially even an unreleased memo from his own Education Department have said that the president has the legal authority to cancel student debt with only the power of the executive branch, he has so far refused to do so. Instead, his administration has been shifting the blame onto Congress to absolve itself from responsibility.
According to Insider reporter Ayelet Sheffey, Vice President Kamala Harris said in an interview set to air on Sunday that the administration must “figure out how we can creatively relieve the pressure that students are feeling because of their student loan debt” in anticipation of the 2022 midterm elections. Early midterm predictions are looking bleak for Democrats, and sapping income from millions of borrowers after promising to take action on the issue will likely only make their chances worse.
For many borrowers, debt relief has been growing more urgent by the day. A recent report done on behalf of Warren and Senate Majority Leader Chuck Schumer (D-New York), leading advocates for student debt relief, found that restarting payments will cause borrowers to collectively lose $85 billion a year. According to estimates by the Federal Reserve, borrowers hold $1.75 trillion in debt in total, making student loan debt an enormous burden on the economy.
Survey data from the Student Debt Crisis Center found that the vast majority of borrowers – about 89 percent – say they aren’t prepared for payments to restart, with many survey respondents reporting that payments would take away a third or even half of their income.
With only a 90-day extension, the pressure is still on for many people with loans. But the extension of the payment pause may temporarily lighten the financial load for families who are also facing the end of the expanded child tax credit due to Sen. Joe Manchin’s (D-West Virginia) unceremonious killing of the Build Back Better Act.
Rep. Alexandria Ocasio-Cortez (D-New York) said on Instagram on Tuesday that public pressure on student loans is working to help sway the administration. “They were IRONCLAD about restarting payments in Jan as recently as a week ago,” she pointed out.
Lawmakers and advocates had increased their calls for Biden to take action on student debt after a spokesperson for the Education Department hinted that the administration was considering the extension this week. “Today would be a great day for President Biden and Vice President Harris to #CancelStudentDebt,” Schumer wrote on Twitter. Democrats like Sen. Jeff Merkley (Oregon) and Rep. Adriano Espaillat (New York) also emphasized the urgency of debt forgiveness.