WASHINGTON, DC – MARCH 03: U.S. President Joe Biden speaks during an event in the East Room of the … [+]
A top White House official suggested this week that President Biden is considering a further extension of the ongoing pause on student loan payments, and that student loan forgiveness is very much still on the table.
“The President is going to look at what we should do on student debt before the pause expires, or he’ll extend the pause,” said White House Chief of Staff Ronald Klain in an interview posted by Pod Save America on Thursday. “Whether or not there is some executive action [on] student debt forgiveness when the payments resume is a decision we’re going to take before the payments resume.”
Student Loan Payment Pause Is Set To Expire In May — But It Could Be Extended
Most federal student loan payments have been paused since the passage of the CARES Act in March 2020. That legislation also froze interest accrual on government-held federal student loans, and suspended collections efforts against borrowers in default. The relief was originally supposed to last only six months, but was subsequently extended several times — first by President Trump, and later by President Biden.
The Biden administration had characterized last year’s extension to January 2022 as the “final” extension of the student loan payment pause. But following the rapid spread of the Omicron Covid-19 variant and rising inflation, Biden extended the pause again to May 1. Education Department officials, while not expressly ruling out a further extension, have been indicating that borrowers should prepare for repayment to resume this May.
But Klain’s comments this week suggest that the Biden administration is considering another extension. There might be several reasons for this, including ongoing inflation (which may only worsen in light of the current turmoil in Europe). Many student loan borrowers may also just not be ready to resume repayment in the spring; a poll released in February by the Student Borrower Protection Center and Data For Progress found that nearly four in ten respondents were not confident that they would be able to resume making payments on their loans.
In addition, a recent report issued by the Government Accountability Office (GAO) indicated that borrowers may encounter problems resuming repayment as the Department is encountering difficulties communicating with borrowers after such a long hiatus — a problem compounded by the fact that the federal student loan servicing system has been undergoing significant changes as major contractors withdraw from the federal student aid system.
Student Loan Forgiveness Is Not Off The Table
Klain’s comments suggest that President Biden might be considering using executive action to cancel at least some amount of student debt for borrowers — a potentially significant development.
Biden said he would support broad student loan forgiveness during his presidential campaign, and he said he was in favor of initiatives to cancel $10,000 in student loans for borrowers. He also supported targeted relief for undergraduate borrowers who attended public institutions and HBCUs, and borrowers devoted to careers in public service. But Biden has since expressed opposition to more significant amounts of student loan forgiveness, such as $50,000 or more that has been suggested by leading Democrats in Congress and advocacy organizations.
White House officials have repeatedly said that Biden would gladly sign a student loan forgiveness bill if Congress passes such legislation. But there are no signs of this happening, and Congress advanced no such bill last year. Biden did not push Congress to pass a student loan forgiveness bill during his State of the Union address earlier this week.
If Congress doesn’t pass a bill, the only mechanism to enact broad student loan forgiveness would be through executive action. Advocates for student loan borrowers, including consumer rights organizations, student loan legal experts, and progressive lawmakers, have argued that existing federal law gives Biden clear legal authority — particularly during a national emergency — to cancel federal student loan debt. But other legal scholars and some former Department of Education officials have disagreed with this assessment. Such legal authority has never before been used on a mass scale, and it has not been tested in federal court.
Advocates For Student Loan Borrowers Express Cautious Optimism
Advocacy groups for student loan borrowers quickly elevated Klain’s comments and expressed hope that Biden may soon take action on student loan debt.
“We have 59 days before millions of people are pushed over a financial cliff because of student loans,” said the Student Debt Crisis Center in a tweet. “We hope [White House Chief of Staff Ronald Klain] and others in the administration are encouraging @POTUS to do the right thing and #cancelstudentdebt.”
“The answer is to cancel student debt. And now,” tweeted the Debt Collective, a debtor’s union advocating for student loan borrowers.
Meanwhile, members of Congress continued to urge Biden to act. “Today would be a great day to cancel at least $50,000 of student debt per borrower,” tweeted Rep. Pramila Jayapal (D-WA), Chair of the House Progressive Caucus.
Further Student Loan Reading
Denied Student Loan Forgiveness? Biden Administration Unveils Appeal Process
Thousands Of Jobs Qualify For Expanded Student Loan Forgiveness Program
Biden’s Student Loan Forgiveness Now Tops $16 Billion After Newest Wave Of Approvals
One Million Borrowers May Benefit From Expanded Student Loan Forgiveness Starting This Month, Says Biden Official