Biden Extends Student Loan Payment Pause, Erases Default Status for Millions

On Wednesday, President Joe Biden officially announced that his administration will be extending the student loan payment pause and erasing default status for millions of borrowers so that they can get a “fresh start” when payments eventually restart.

Biden announced that the administration will extend the pause to the end of August. “I know folks were hit hard by this pandemic. And though we’ve come a long way in the last year, we’re still recovering from the economic crisis it caused,” he said. “This continued pause will help Americans breathe a little easier as we recover and rebuild from the pandemic.”

The Education Department announced that they will also be moving borrowers out of defaultIt could reduce financial uncertainty and burdens for millions. There are currently More than 7 million student loan borrowers in default, according to the agency’s data.

Progressive lawmakers Previously advocatedBiden urged the elimination of default status for these borrowers and said that it was a step he could take to ease confusion and pressure for people who are in debt. They saidThe CARES Act provides debt relief provisions that allow the Education Department to legally do so.

But progressives’ ultimate goal is for Biden to cancel student debt — preferably all of it, some lawmakers and advocates say.

Biden’s announcement prompted an explosion of calls for him to cancel student debt. Biden made a campaign promise to cancel $10,000 in loans for all borrowers, but he has not followed up on that promise over a year into the presidency. progressive lawmakers’ and advocates’ warnings that his failure to do so will jeopardize Democrats’ chances of winning seats in Congress this fall.

“With costs rising, the last thing working people need right now is another costly monthly payment. Now is the time to finish the job and cancel student debt,” the Congressional Progressive Caucus wrote on Twitter. The lawmakers pointed out that student loans are disproportionately affected by Black and Brown people, and also impose a significant burden on seniors.

Senator Elizabeth Warren (D.Massachusetts), a leading figure in Congress on the subject of student debt, applauded the extension but urged the president to do more. Warren has previously asked Biden to cancel upto $50,000 of debt per borrower. Economic impact is hugeBorrowers are often left with heavy student loan debts.

“Last week, my colleagues and I Nearly 100 Members of Congress were led in urging [President Biden] to extend the federal student loan payment pause and today the President heeded our calls,” she said. “This extension is critical, but now is the time for the President to use his authority to #CancelStudentDebt.”

Many debt advocates brought up a 2020 tweet from Biden’s official campaign account saying that he would cancel a minimum of $10,000 of student debt if elected.

The Debt Collective, which has been advocating for Biden to eliminate student debt, said that the pause extension is just a bandaid for the problem, which will always loom as long as student debts aren’t canceled. The group marched to the Department of Education Monday to urge Biden to sign. an executive orderAll federal student debt cancelled

“Now, millions of families will be able to keep billions of dollars in their pockets — a testament to the collective power of debtors,” said Braxton BrewingtonDebt Collective spokesperson. “But instead of pushing pause on the student debt crisis every few months — kicking the can down the road — President Biden should actually solve the crisis by picking up his pen and canceling student debt.”