It appears that the Biden administration is considering extending the hiatus again, but that doesn’t definitely mean they’ll be making those student loans too.
On his first day in office, President Joe Biden signed one Implementing ordinance that froze repayment of federal student loans by eight months. The extension came after the initial freeze included in the Trump administration’s CARES bill, passed in March 2020, which freezes payments for a period of six months. Before Biden’s Executive Order, Trump’s freeze was again extended to December 2020. Biden’s extension delayed the start of repayments until at least October 2021.
Recent comments from Biden’s Minister of Education, Miguel Cardona, addressed the possibility of further extending the delay in repaying federal student loans. While speaking at a conference for the Education Writers Association, Cardona was asked if the administration intended to extend the freeze on student loan repayments, to which he replied that the administration was “looking into it”. Cardona went on to say that the government’s decision was data-driven and would be based on the country’s progress in general recovery from the pandemic. Regardless of the decision, Cardona also stated that whenever student loan repayment begins again, a “start-up phase” would be introduced to ensure that the process is “as smooth as possible” for borrowers. </ In addition to the hiatus in repaying federal student loans, the Biden government has also canceled loans for 72,000 defrauded borrowers and 41,000 borrowers with disabilities, and extended the freeze to those with privately held loans.
According to the Department of Education, the collective effort to repay student loans has saved student loan borrowers nearly $ 5 billion a month by avoiding interest payments. However, a separate report found that the average amount saved by individual borrowers was just over $ 2,000.
In addition to student loan repayment measures, the American family plan proposed by the Biden administration sees $ 109 billion Dollars ahead to free up community college, along with the Pell Grant price increase and investment in a universal preschool.
There is no direct relationship between a possible extension of the federal and student loan repayment freeze the possibility of debt relief for students. According to White House Chief of Staff Ron Klain, President Biden has hired Secretary Cardona to write a memo on the President’s “legal authority” to make student loans and cancel up to $ 50,000. Biden will then make a decision on how to proceed with the problem based on the contents of the memo.
Progressive voices in Congress are increasingly calling for such a move. During her presidential campaign, Senator Elizabeth Warren unveiled a massive student loan granting scheme, and she and other Democratic lawmakers began to comment on the need for a $ 50,000 student loan grant. It is still unclear whether the President has legal authority to take such a measure.
Eli Fuhrman is a contributing writer for The National Interest.