With the stroke of a proverbial pen last Friday, the Biden Administration froze payments on roughly $1.4 trillion in student debt until February 1, 2022, extending the deadline from the October 1.
The news likely comes as welcome relief for the nation's 42.8 million student borrowers, many of whom continue to struggle as youth employment lags and the shadow of the Delta variant looms ever larger.
"The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during a national emergency," said Miguel Cardona, the U.S. Secretary of Education, in a statement. "As our nation's economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment."
Meanwhile, a triumvirate consisting of Senate Majority Leader Chuck Schumer and Massachusetts' Senator Elizabeth Warren and Representative Ayanna Pressley continues to press the White House for broader loan forgiveness.
"While this temporary relief is welcome, it doesn't go far enough," said the cohort in a joint statement. "We continue to call on the Administration to use its existing executive authority to cancel $50,000 of student debt. Student debt cancellation is one of the most significant actions that President Biden can take right now to build a more just economy and address racial inequity."
According to sources, the Administration is currently consulting with lawyers at the Department of Education and the Justice Department concerning the legal realities of student debt forgiveness by way of executive fiat. Although Biden himself has strongly advocated for a more measured approach to loan forgiveness, such as canceling up to $10,000 of debt per borrower, a number well short of the progressive's goal.
Besides intense pressure from the left, bureaucratic snags and an overall lack of public awareness may have swayed the Administration's decision.
Data gathered by Pew Charitable Trusts in May and June found that 67% of borrowers said they'd find it difficult if payments were to resume the following month. However, 52% of student borrowers surveyed were unaware that they'd even have to start making payments on October 1.
Renewing the payment freeze gives the Department of Education more time to prepare student borrowers to resume payments and to navigate the complexities surrounding the Pennsylvania Higher Education Assistance Agency's decision not to renew its contract with the Federal Government. Under the prior deadline, the Agency's 8.5 million student borrowers would've had to restart payments, only to have to change their loan servicer a few months later.
Meanwhile, legislative hope for more generous debt cancellation might come down to the use of "budget reconciliation" this fall. Theoretically, under the process, Democrats could cancel huge swathes of student debt without Republican support. But such efforts depend on Democrats retaining a unified front, which seems unlikely as the gulf between the moderate and progressive wings of the party seemingly widens.