Jen Psaki, White House Press Secretary, recently stated that the Biden administration does not plan to extend the student loan payment suspension. This caused outrage among debt advocates as well as people who have struggled with student loans repayments for years.
Psaki’s video pledging that the administration would soon reveal its plan for student debt payments was shared on Twitter over the weekend. It received 1.7 million views by Monday.
“We’re still assessing the impact of the Omicron variant,” Psaki said. “A smooth transition back into repayment is a high priority for the administration.” The administration is planning to allowThe student debt payment suspension will end at the end January. The pause was put in place to assist borrowers during the economic downturn. It has been in effect since March 2020.
.@PressSec: “In the coming weeks, we will release more details about our plans. A smooth transition back into repayment is a high priority for the administration.” pic.twitter.com/RYfurc38CR
— Tracking Biden From The Left (@BidenTracking) December 10, 2021
The Biden administration’s announcement comes just as the movement for lawmakers to take action on the student debt crisis is surging. Many advocates and borrowers have expressed frustration over the administration’s failure to act.
“I’m angry at Biden backtracking on a key pillar he ran on: cancellation. I’m fearing what the end of [the] moratorium will do for so many people,” wrote Debt Collective member Wen Zhuang. Other Twitter users noted that allowing repayments to start during a critical election year is a poor strategy for the nation’s top Democrats.
The Congressional Progressive Caucus called on the White House to take action, saying “45 million Americans are stuck in the student debt trap. It’s preventing them from buying homes, starting families, and investing in their communities. [President Joe Biden]He has the power to act immediately. He should use it, and provide millions with desperately needed relief.”
Biden stated that he would cancel $10,000 in student debt per borrower on the campaign trail. But the Biden administration hasn’t just refused to cancel student debt– it’s also Lies about the president’s ability to do so. Psaki, who has repeatedly claimed that Congress should adopt a bill to cancel the debt instead of Biden during press conferences, despite knowing fullwell that it would not be. nearly impossibleThese legislation should be passed by Democrats and progressives.
Advocates for debt cancellation repeatedly stated that Biden could cancel federal student loan debt with a stroke. This is a more reliable strategy to use than trying to pass the measure through Congress. Legal experts Also,Biden claims that he has the authority to cancel student loan debt. This may be why his administration has been keeping a memo from Education Department regarding the legality and legality of the action hidden for months.
Individuals are often forced into pay significant portionsStudents are required to contribute a portion of their income to make student debt payments. This makes student debt a huge burden for many. roughly 44.7 million AmericansThose who are currently trying pay off loans. Often, these payments don’t seem to have any set ending; many borrowers have reported that they’ve paid off more than they originally owed but that they still owe several times their original loan amount anyway.
These loans also keep borrowers out of the market for participation. Many areas of the economy. Loans often affect borrowers’ credit scores, endangering their ability to buy a home or secure housing. In the meantime, debt cancellation could increase incomes and stimulate economy by releasing thousands of dollars to borrowers.
Recent data indicates that most student debt holders aren’t ready to make new payments. The Student Debt Crisis Center survey of over 33,000 borrowers, 89 percent of borrowers who are employed full-time said that they aren’t financially ready to restart student loan payments in February.
Restarting payments can cost borrowers billions of money. A recent report for Senator Majority Lead Chuck Schumer (D–New York) and Senator Elizabeth Warren (D–Massachusetts). This is what we foundBorrowers will pay $7 billion per month to restart their payments and $85 billion annually. The analysis showed that student loans can be cancelled for more than $173 billion each year to the Gross Domestic Product.
Although Biden has refused to answer lawmakers’ and activists’ calls to cancel student debt, there are steps his administration can take to ease the burden on borrowers. Last month, Warren and Sen. Bernie Sanders (I-Vermont) Call onThe Department of Education will move over 8,000,000 borrowers out of default status to their loans before payments resume. “Allowing payments and collections to resume without taking these actions to protect borrowers in default would undermine our economic recovery,” the lawmakers wrote in a letter.