The Biden administration is eyeing another potential extension of a student loan moratorium past its May 1 expiration date.
Education Department officials have instructed companies that administer federal student loans to delay sending required notifications to borrowers that their payments will resume, according to the Politico.
The guidance didn’t mention a possible extension, but the notice delay is a clear indication that the administration is considering another extension of the pandemic-era pause.
The White House has indicated it cannot tolerate federal student loans without a congressional act, but White House Chief of Staff Ron Klain indicated last week that they may extend the freeze again beyond the May deadline.
“The president will consider what we should do about student debt before the pause ends, or he will extend the pause,” Klein said on a recent episode of the Pod Save America podcast.
President Trump halted payments on federal student loans for the first time in March 2020, and the pause was originally expected to last six months. Trump extended the respite into 2021, and then Biden continued stretches throughout the Delta and Omicron variant.
But Biden in recent weeks has sent a message home about a return to normal life, with the CDC dropping mask guidelines and encouraging Americans to return to the office.
Conservative organizations on Tuesday wrote a letter to the Biden administration urging it to restore student loan payments that cost the US government $5 billion a month.
The speech, led by Americans for Tax Reform, describes the stop as a “special favor to the progressive elite.”
The groups claim the pause has made inflation worse, costing taxpayers $100 billion since March 2020. If federal student loan payments resume in May as scheduled, the pause would provide borrowers with $120 billion in benefits.
“Although the Left claims that extending the suspension will help lower-income Americans, it is in fact providing free lunch to wealthier individuals,” message states, adding that the top 40 percent of earners own 75 percent of student loan debt. The top 20 percent of households hold $3 in student debt for every $1 held by the bottom 20 percent, according to the Committee for a Responsible Federal Budget.
About 43 million borrowers own approximately $1.61 trillion in federal student loan debt.
President Biden has extended the student loan moratorium until at least May
The groups argue that “ongoing extensions put the taxpayer at risk of not collecting the $1.6 trillion student loan balance.”
“This policy is one example of the many grants, subsidies, and payment pauses by which the federal government floods the economy with so much money that demand grows so rapidly that production cannot keep up,” the letter states.
Inflation hit a 40-year high, with a 7.5 percent rise in the consumer price index in January. February numbers are expected to drop this week.
Meanwhile, progressives pushed hard for the president to cancel all student loans, arguing that it would bring relief to low-income Americans who could not afford the exorbitant costs of education.
“The suspension of student loan payments is unfair to blue-collar Americans who have not taken on tens of thousands of dollars in debt and those who have proactively paid off their debt,” the letter read. Many Americans have sought other opportunities rather than going into debt to obtain an expensive four-year degree, such as a less expensive tuition, serving in the military to receive educational assistance, or working long hours to complete schooling.
The letter was signed by 11 other groups including the Koch brothers-backed Americans for Prosperity, Heritage Action for America, National Taxpayers Union, Taxpayer Protection Coalition, and others.
Sens. Chuck Schumer of New York and Elizabeth Warren of Massachusetts have introduced a proposal to cancel up to $50,000 in student loans. Biden proposed waiving $10,000 in loans.
The president has already canceled $16 billion in student loans in his first year in office, relieving more than 680,000 borrowers of their debts, according to the Department of Education (DOE). Many of those eligible for debt relief have attended universities that the Education Ministry considers to have defrauded their students.
It was announced Wednesday that the Biden administration will give away another $6.2 billion in student loans to 100,000 borrowers after it expanded eligibility for the Public Service Loan Forgiveness Program, in which public service workers who have made 10 years of monthly payments can apply for on the rest. relief from their debts.
