Is Biden right extending federal student loan repayments?
- On December 22, 2021, President Biden extended the student loan payment pause an additional 90 days through May 1, 2022, from the previous January 31, 2022 deadline.
- Former President Trump first granted student loan relief in March during the first spikes of the pandemic, then extending it to October, and again in December. Before leaving office, he extended deferment until January 31, 2021.
- As of December 3, 2021, the US Bureau of Labor Statistics reported the unemployment rate fell by 0.4% to 4.2%. The “number of unemployed persons fell by 542,000 to 6.9 million.”
- According to Forbes, there are 45 million Americans who owe a combined total of $1.6 trillion in student loan debt.
President Biden reversed his course after initially stating his administration would not extend the pause on student loans just two weeks ago. Without such an extension, the federal student loan repayment moratorium was due to expire on January 31, 2022. Now, the moratorium has been extended until May 1, 2022. This is merely pushing out the inevitable.
Biden claimed it was due to the surge of the Omicron variant. Most likely, he caved to pressure from the progressive far-left of the Democratic party. As it stands now, student loan borrower balances have been frozen for nearly two years (since March 2020). That seems long enough. Those with student loans, just like any other borrower, have an obligation to pay those loans back. Individuals with mortgages, credit card debt or student loans from private lenders have not gotten a similar nearly two-year 'pause.'
Recent college graduates who have student loan debt obligations have been and are less likely to work right away if they do not have to pay back loans at this time. At a time of such labor shortages throughout the country, the government should not be doing anything to disincentivize anyone from working and jump-starting their career.
The Congressional progressives who pressured Biden into extending the student loan repayment moratorium have an ultimate goal of total student loan forgiveness. It should not come as a surprise to any adult who must balance the budget of their life that money, like practically everything else, is not free.
President Joe Biden's decision to freeze student loan payments through May of 2022 will benefit tens of millions of Americans. Although this seems to many as a compromise compared to the president's bold promises in the past, it proves that the issue is still part of the nation's agenda.
Throughout his campaign, Biden pushed various student loan forgiveness options, including one forgiving up to $10,000 in debt. Earlier in his campaign, Biden intended to pinpoint the humanity of the dilemma, explaining that people are stuck deciding between paying rent or making their student loan payments. While this may be true, its severity would lead one to think it should be high on his agenda.
By recognizing how Americans are struggling to balance their student loan payments with other financial obligations, Biden would be fulfilling his party's platform promises to freeze student loan repayments. Although his 'Build Back Better' plan was passed by the House of Representatives, it failed to mention anything about student loans. Freezing payments for the next few months provides some temporary relief as this topic garners national attention.
The pandemic has negatively affected the economy, and people are less likely to pay their student loans off now than before. Although the past two years have caused our nation to suffer financially, the emergence of the Omnicron strain brings new causes for concern. States from 'Hawaii to Texas to Massachusetts' and Florida have detected many Omicron cases, causing people to call out of work. Failing to have a steady income will cause borrowers to fall behind on payments, affecting their credit and, in turn, the economy.