On Tuesday, April 5th, reporting revealed President Joe Biden once again will extend the student loan debt payment break – the fifth time the break has been extended since it began in March of 2020 as the pandemic hit our shores for the first time. This time, President Biden will extend the moratorium on student loan debt payment and interest until August 31st, 2022.
The Extended Payment Pause is Good News for Borrowers
The news is welcome to the 43 million Americans (12.9 percent of them) who carry student loan debt to the tune of $ 1.6 trillion. While most Americans who hold student loan debt are from 25 to 34, Gen Xers – people 35 to 49 – actually hold the most debt per person. And that includes parents who hold student debt for their kids. A January survey found that 34 percent of parents who hold Parent PLUS loans do not think they’ll be able to pay them off (3.6 million parents total hold Parent PLUS loans.) Another survey in June of 2021 found that at the time, over half of Americans supported wholesale student debt cancellation.
It’s not difficult to see why student debt cancellation is so popular. Student debt – and notably the crushing interest rates that can make it much harder to pay off – has stopped many Americans, many of whom are becoming parents or have families, from being able to save for retirement, engage in homeownership, save up for their kid’s college in the future, and more. But it’s also, for many advocates and student debt holders themselves, starting to get a little frustrating. Many advocates want Biden to take stronger, and more decisive, action on student debt.
But Biden Still Hasn’t Taken Decisive Action on Cancellation
After all, though inflation has risen a whopping 7 percent, and the pause on thousands of dollars of student loan payments a month (5 billion has been saved so far for 41 million borrowers per month, per the Education Department and USA Today) will help parents keep their budgets as tight as possible, President Biden did have a campaign promise to cancel $ 10,000 of student debt per borrower.
In 2020the average amount of debt a borrower held for their Bachelor’s degree was $ 28,400. The average Gen Xer holds about $ 45,000. So while $ 10,000 certainly would not end most people’s debt obligations altogether, it would make a significant debt in an amount of money owed that many people struggle to pay off in their lifetimes.
He Has Options To Cancel Debt – And Advocates Want Him to Take Them
Even though Biden promised to cancel that amount of debt, he has not yet taken action on doing so since his inauguration. While Biden argues that he would need the Senate and House to pass a law to cancel the debt in order to do so, other experts say he has the broad legal authority to cancel debt via executive action.
There’s a slim-to-none likelihood that such a debt cancellation bill would ever make it out of the Senate, which is split 50-50. Meanwhile, progressives like Senator Elizabeth Warren and Chuck Schumer have called for Biden to cancel $ 50,000 per borrower “with the stroke of a pen.”
President Biden has so far instead focused on targeted debt relief for people unable to pay their loans due to disability, people who have been defrauded by for-profit public colleges, and more. But broad cancellation is still out of reach.
Groups like the Debt Collective have organized 1,000 professors to sign a letter urging the President to cancel student debt for all; unions and community groups have also organized to demand the same.
