President Joe Biden will continue a pandemic-spurred pause on student loan repayments until May 1, he said Wednesday.
Loan repayments were set to restart Jan. 31, following months of the U.S. Education Department not requiring payments during the pandemic. Biden told the department to extend the moratorium initially placed by President Donald Trump’s administration. It was the third extension Biden has directed.
Trump’s administration froze requirements to repay student loans in the pandemic’s early days in March 2020. Upon taking office, Biden extended the pause for six months, saying that many borrowers in the pandemic-rocked economy were still having difficulty paying.
As that deadline approached, he extended it through Jan. 31, 2022, but had been under pressure in recent weeks to push it back further as the highly transmissible omicron variant has spread through the U.S.
Georgia U.S. Sen. Raphael Warnock, who penned a letter with 13 Senate Democrats urging the president to continue the pause, celebrated the decision Wednesday.
“Glad to hear the White House read my letter & is listening to the countless Georgians and Americans struggling in this pandemic who have been pushing to extend this necessary reprieve for a little while longer. Now, let’s get to work cancelling some of this student loan debt,” Warnock tweeted.
Warnock and other Senate Democrat had argued in the letter that the country is still in a state of national emergency due to the pandemic and that the administration should extend the freeze.
“The U.S. Department of Education (“Department”) notes the waiver of student loan interest is saving borrowers an additional $5 billion each month,” they wrote in the letter. “This is money that is now available for housing, food, and other daily necessities to help borrowers support themselves, their families, and their communities during this pandemic.”
An Education Department news release said the pause would allow the administration to review the omicron variant’s effects.
“This additional extension of the repayment pause will provide critical relief to borrowers who continue to face financial hardships as a result of the pandemic, and will allow our Administration to assess the impacts of Omicron on student borrowers,” Education Secretary Miguel Cardona said in the release.
Biden said Wednesday the freeze has benefited 41 million Americans and was still needed, even amid a recovering economic landscape.
“While our jobs recovery is one of the strongest ever — with nearly 6 million jobs added this year, the fewest Americans filing for unemployment in more than 50 years, and overall unemployment at 4.2 percent — 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,” he said in a White House news release.
“This is an issue Vice President Harris has been closely focused on, and one we both care deeply about.”
Senate Democratic Leader Chuck Schumer of New York and leading Massachusetts progressives Sen. Elizabeth Warren and Rep. Ayanna Pressley also applauded the move and renewed their call for Biden to cancel $50,000 in federal loans per borrower.
Some loan forgiveness
The Biden administration has forgiven up to $11.5 billion in loans for nearly 600,000 borrowers.
However, that forgiveness only applies to borrowers in specific circumstances — those who have permanent disabilities, who attended schools that are no longer in operation or public service workers.
During a town hall in Wisconsin in February, Biden was clear that he did not support the cancellation of up to $50,000 per student borrower and said that he only supported a $10,000 cancellation by Congress.
In a letter to Biden, the Student Borrower Protection Center — a student loan advocacy group — along with 200 organizations pushed for immediate student debt relief.
“It is critical that your administration continue to deliver on your promises made to student loan borrowers and their families before ending the pause in payments and collections,” according to the letter.
“Borrowers need immediate relief from the crushing burdens of massive student loan debt as the pandemic exacerbates financial strain for all Americans and throws existing racial disparities in wealth and educational attainment into especially stark relief.”
The organizations pointed out that the “burden of student debt and the costs of our broken student loan system fall disproportionately on Black and Brown borrowers.”
The Brookings Institution, a left-leaning think tank, reported in 2016 that, on average, Black students who graduated owed $7,400 more than white, Asian and Latino students who graduated at the same time.
Repayment struggles
Stephen Graves, the director of undergraduate studies for the Department of Black Studies at the University of Missouri, said in an interview that Black student borrowers would have been affected the most by the end of the freeze.
“A lot of Black students usually end up with undergraduate degrees, and or majors, or taking jobs that are less likely to allow them to pay back those student loans,” he said.
Graves said that Black borrowers take on larger amounts of student debt, likely more than other groups, and struggle with repayment.
Even with the pause on student loan repayments for the last two years, Black borrowers are still unlikely to benefit as much as white borrowers, he said.
“Not having to pay those student loans in the last couple of years has allowed them some kind of flexibility, of course, but unfortunately that’s happened during the time of COVID for which there’s been a higher amount of layoffs and job losses and Black people are most likely to be in laborious jobs that don’t allow them to work from home,” he said.
He added that young voters are not going to be motivated to vote for Democrats if campaign promises such as reforming student loan debt are not kept.
“You went out there on a platform of forgiving student loan debt,” Graves said of Biden. “You came out on the platform of student loan forgiveness and then you of course then reneged and then lied about it and did not do so. Young people are going to remember these things.”
In October 2020, during a town hall in Miami, Biden said that “I’m going to eliminate your student debt if you come from a family (making less) than $125,000 and went to a public university,” according to Black Enterprise.
Biden later added that, “I’m going to make sure everyone gets $10,000 knocked off of their student debt.” Biden’s campaign platform called for making public college tuition-free for those earning less than $125,000 and other initiatives.
Graves added that many of the policies that Democrats are pushing do not help young voters, but benefit middle class white voters, such as the expanded child tax credit and paternity leave.
“Things like the child tax credit are doing nothing for young Democrats,” he said, “Young people aren’t having kids. We can’t afford to have kids.”
Georgia Recorder Deputy Editor Jill Nolin contributed to this report.
