President Joe Biden’s administration will announce an extension on student loan repayments that will last until August 31, it was reported on Tuesday
President Joe Biden announced on Wednesday that the federal government will be extending its pause on student loan repayments through August 31.
It comes as progressives continue to put pressure on the White House to cancel college debt altogether, while Republicans criticize the moratorium as an ‘insult’ to taxpayers.
Roughly 43 million federal student loan borrowers have not been required to make payments for more than two years, since the CARES Act was first signed into law under Donald Trump.
Interest rates on student loans held by the government will also remain at zero.
It was due to end on May 1, but officials are seeking to give Americans a few more months of relief as the economy continues to recover from the COVID-19 pandemic and while the cost of consumer goods continue to climb to record highs.
The Biden administration previously extended the moratorium for 90 days in late December amid the Omicron virus wave.
The borrowers affected by the moratorium owe a combined $1.6 trillion in debt held by the US government, according to the latest data from the Education Department.
But members of House Democrats’ progressive ‘Squad’ believe it does not go far enough to help.
Rep. Alexandria Ocasio-Cortez (D-N.Y.) criticized the extension as just prolonging the uncertainty felt by people with thousands of dollars of student debt.
‘I think some folks read these extensions as savvy politics, but I don’t think those folks understand the panic and disorder it causes people to get so close to these deadlines just to extend the uncertainty,’ the Democrat firebrand said on Twitter Tuesday.
‘It doesn’t have the affect(sp) people think it does. We should cancel them.’
Progressive Squad members Reps. Alexandria Ocasio-Cortez (left) and Ayanna Pressley (right) have been among the most prominent voices in Congress pushing for Biden to cancel federal student loan debt
She added, ‘I’ve had so many people asking me “My payments are $X hundred / thousand a month. What do you think is going to happen in May? I need to make sure I delay X medical procedure or prescription / sell my car / make X huge change to prepare.” The limbo & uncertainty is also a strain.’
Her fellow New Yorker, Rep. Jamaal Bowman (D-N.Y.), pointed out that Biden promised to reduce student loan debt during his 2020 presidential campaign.
Bowman wrote to Biden on Twitter: ‘You made a promise to the American people and it’s time for you to follow through. Cancel student loans and help us unlock a better and brighter future for over 45 million people in this country.’
During his time in office so far, the president authorized program expansions that led to significant student loan relief for more than 700,000 people, with a value of at least $17 billion.
However many left-wing voters, particularly young progressives who were at first skeptical of Biden’s campaign, felt the president has since fallen short of delivering on his aim to forgive up to $10,000 in student debt per borrower.
Rep. Ayanna Pressley (D-Mass.) called on Biden to cancel student debt ‘& bring transformative relief to millions—especially Black women’ in a Tuesday afternoon tweet.
‘Black women are the most educated group in our country, but also the most burdened by student debt,’ Pressley wrote.
Ocasio-Cortez claimed the president’s student loan extension actually harms borrowers by extending their period of uncertainty
Her fellow New York lawmaker, Rep. Jamaal Bowman, pointed out that Biden promised to cancel up to $10,000 in student debt per borrower while on the 2020 campaign trail
Pressley also chimed in on Tuesday, highlighting the impact that student loan payment moratoriums have on black women
Aside from the Squad, Biden’s reported debt relief extension falls short of dozens of Democrat lawmakers’ expectations.
Nearly 100 members of Congress within the president’s own party signed onto a letter last week urging the White House to extend the moratorium ‘until at least the end of the year and to provide meaningful student debt cancellation.’
The effort was led by Senator Elizabeth Warren (D-Mass.) and Senate Majority Leader Chuck Schumer (D-N.Y.).
‘Canceling student debt is one of the most powerful ways to address racial and economic equity issues. The student loan system mirrors many of the inequalities that plague American society and widens the racial wealth gap,’ the lawmakers wrote.
‘Student debt cancellation must be one of the key actions in your comprehensive approach to advance equity as our nation works to rebuild a stronger and more equitable economy.’
Nearly 8 million jobs have been created under Biden’s presidency so far, signaling a strong recovery from the pandemic’s economic downturn.
However, the rebound has also sent consumer prices through the roof — with inflation rising 7.9 percent in February from the same time last year, according to the most recently available Labor Department data. The figure is a 40-year high.
Warren, Schumer and Pressley released a recent analysis showing that resuming federal student loan payments could as much as $85 billion out of the US economy every year.
Republicans in Congress have taken the opposite approach to Democrats on student loan debt, calling on Biden to end the moratorium and arguing it presents an unfair burden on taxpayers.
Senator Tom Cotton (R-Ark.) tweeted the move was ‘reckless’ after the news broke.
‘President Biden’s perpetual student loan payment moratorium is an insult to every American who responsibly paid debts. There’s no free lunch: this reckless move puts taxpayers on the hook for billions,’ Cotton said.
‘Reckless loan forgiveness policies are a short-sighted answer that would crush American taxpayers and leave our higher education system more broken than before,’ GOP lawmakers on the House Education and Labor Committee said last month.
‘This administration cares more about appeasing the progressive wing of the Democrat party than offering solutions to address the rising cost of college.’
Conservative podcast host Megyn Kelly blasted Ocasio-Cortez for advocating for what she called an upper-class ‘handout.’
”Everyone else in this country has always figured out a way to budget for their education, and again, it’s progressivism masquerading as compassion,’ Kelly said on her show Ruthless.
‘It’s a handout to the wealthiest, liberal, coastal… it’s like the liberal coastal elite embodied.’