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Education

Biden to delay student loan repayment, again extending pause, as Dems push for forgiveness

WASHINGTON — President Joe Biden plans to extend the moratorium on federal student loan payments through Aug. 31, the Associated Press reported, citing a federal official. For tens of millions of Americans, student debt limbo will continue another four months. 

The move will mark the seventh extension since the pause took effect in March 2020. This time, inflation is climbing and gas prices are soaring in connection with Russia’s invasion of Ukraine. All the while, the nation’s $1.7 trillion student loan debt portfolio continues to grow, with no firm direction for the indebted.

The freeze saves 41 million borrowers about $5 billion a month, the Education Department has said previously.

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Though borrowers likely will appreciate the extra wiggle room, many have grown frustrated with the continued extensions without a plan for widespread forgiveness. Both conservative and liberal politicians are expected to pan the Biden administration’s actions. 

Some Democratic lawmakers, including Senate Majority Leader Chuck Schumer and Sen. Elizabeth Warren of Massachusetts, have been pressing Biden to use his executive authority to cancel up to $50,000 in student loan debt per borrower. As recently as March 31, dozens of Democratic lawmakers sent a letter to the president urging him to extend the pause through year's end and "to provide meaningful student debt cancellation." 

But Biden has said he believes such action must come from Congress. That’s likely an uphill battle with an evenly split Senate and Republicans broadly opposed to debt forgiveness. The president had campaigned on forgiving up to $10,000 in debt per borrower. 

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Conservative advocacy groups, led by Grover Norquist’s Americans for Tax Reform, say the moratorium has been overly generous to those with student loan debt at the expense of those without a higher education. They sent a letter March 8 to Education Secretary Miguel Cardona urging him to restart payments as a way to address the national deficit and combat inflation.

President Joe Biden has pushed back the restart of student loan payments multiple times, as he spars with Democrats over the best course of action for the nation's tens of millions of borrowers. Here, the president, with first lady Jill Biden, a community college professor, arrives at Duluth International Airport on March 2.

Meanwhile, borrowers are getting more insistent in their pleas for widespread loan forgiveness.

On Monday, borrowers from California, Florida, New York, Massachusetts, Ohio and Pennsylvania traveled to Washington to press the president to cancel student loan debt. They assembled outside of the Education Department with signs that read, “Can’t Pay, Won’t Pay,” or “You are not a loan.” The Debt Collective, an advocacy group focused on debt cancellation, arranged the event.

Borrowers at the demonstration said the payment pause helped them, but they wanted long-term cancellation. They said the repeated extensions make it difficult for them to plan.

“The pause doesn’t change the fact that it’s still not affordable,” said Elisha DeJesus, 27, a Massachusetts therapist for children.

DeJesus has about $40,000 in student loan debt. She said it would be a struggle to restart payments given recent inflation. She's also paying for gas more frequently  since she has returned to working in an office. 

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Regardless of when payments restart, the government is expected to face challenges in getting borrowers to resume their payments. A January report from the Government Accountability Office found nearly half of the 42.3 million borrowers covered by the freeze are at high risk for delinquency. 

The at-risk group includes people who were delinquent on their loans before the pause, those who dropped out of college and graduates within the past three years who haven’t had to make any loan payments, thanks to the freeze.

Though it remains unclear if the president ultimately will erase student loan debt en masse, the Education Department has taken some steps to offer borrowers permanent relief. The agency is on track to cancel more than $17 billion owed by borrowers since Biden took office. That forgiveness has come through expansions of existing debt forgiveness programs, such as those for borrowers who have permanent disabilities or were defrauded by their schools. 

For instance, the department announced recently it had identified about 100,000 borrowers who would benefit from changes it announced to the Public Service Loan Forgiveness program in October. That would clear about $6.2 billion in debt for the affected borrowers. And the government sent another $415 million to 16,000 students defrauded by for-profit universities.

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Correction: A previous version of this story incorrectly tallied the number of times the government has extended the student loan payment freeze. This is the seventh extension, the Department of Education said. 

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