President Biden is facing a tough situation on student loans ahead of the midterms or for the Student Loan Pause Extension. Democrats are putting pressure on him to cancel large numbers of them.
The deadline is critical to add to the pressure. Millions of borrowers will have the burden to pay by May 1, unless the freeze on federal student loans payments that were put in place during the pandemic is extended.
Biden was asked by the Senate to extend student loan pause or the freeze beyond the midterms.
However, advocates for forgiveness along with key Democrats desire more than another freeze.
Natalia Abrams is the president and founder of the Student Debt Crisis Center (SDCC).
Biden extended the suspension for the last time in December. Loan payments were first suspended in March 2020 by President Trump. They have been extended five times since.
A growing number of Democrats are calling for a new Student Loan Pause Extension of the current one, increasing pressure on the White House.
Sen. Cory Booker (D.N.J.), stated this week to The Hill that “I’m hopeful the president will take action.” “It is extraordinarily well-liked, not only among students but also families of people who are going to college.”
Jen Psaki, White House Press secretary, said Friday that a decision should be taken before May. She indicated that the administration will consider the impact of economic data on various groups of people, including students.
Biden, one of many Democratic presidential candidates, called for the complete cancellation of federal student loan programs in 2020.
In the last two decades, student borrowers increased dramatically. According to Peter G. Peterson Foundation, student debt has risen sevenfold between 1995-and 2017, rising from $187 million to $1.4 trillion to $1.4 billion.
Last year, the Federal Reserve estimated that approximately $1.7 trillion of student loan debt was racked up nationwide.
Biden supported the campaign’s forgiving of $10,000 per person in federal student loans. Charles Schumer (D.N.Y. Senate Majority Leader) has pressed for $50,000 per borrower, or to cancel all debt.
Democrats warn that their inaction could lead to them losing the November election when they will be trying to keep hold of Senate and House majorities.
Rep. Ilhan Omar (D.Minn.), has repeatedly called on Biden for the elimination of “all student loans” in the past. She stated this week that “inaction is going be dangerous to use in the midterms.”
Omar spoke out about Democratic voters, saying that “enthusiasm” is low. Omar stated that it is important to listen and learn from the people who sent us to represent them.
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Patty Murray, D. Wash., is the Chairwoman of the Senate Health, Education, Labor, and Pensions Committee. She called for an extension of the freeze through 2023. Fast 100 Democrats in both chambers supported the extension over the last month, citing inflation-related concerns.
“We hear from borrowers who will change their voting preferences and perhaps not even vote because of the failure to see student loan cancellation pass,” said Cody Hovnanian. He is SDCC’s executive director.
Biden was questioned by House Progressive Caucus leaders during a Wednesday sit-down. Rep. Mark Pocan, D-Wis., attended the meeting. He said members discussed next steps such as “possible cancellation”, possible extension of certain programs that we’re already running, and repayments.
He stated that “the president is very aware that this is essential to several people who just want to get by, and the good news is that we had a great discussion on that and other, I think, important pocketbook issues.”
Biden asked for a memo from the Department of Education in April to clarify his authority to cancel student loan debt by executive action. The memo has not been publicly released by the administration since then.
When the White House was asked for its opinion, it pointed to the “breathing area” the Student Loan Pause Extension had given to borrowers. Biden was also mentioned as having not paid federal student loans.
“The Education Department will work hard to ensure a smooth transition to repay in May. The president provided $10,000 in debt relief in support of Congress. “He continues to examine what administrative debt relief actions could be taken,” a White House official said.
The Hill was told by a spokesperson for the Department of Education that student debt reduction is a priority. The spokesperson said that the administration is “committed” to providing necessary relief and reaching our ultimate goal, which is to make college more affordable.
According to the department, it will keep in touch with servicers or borrowers regarding any repayment updates.
In recent weeks, the Biden administration instructed companies not to send notices about student loans payments resuming.
Jared Bernstein, the Council of Economic Advisers member, admitted that student loan borrowers have “real challenges making debt repayments” when asked Friday by the White House press briefing if borrowers were willing to resume their payments.
Bernstein also mentioned that White House Chief Of Staff Ron Klain previously “leaned into that” question. Klain indicated in March that the White House would lift the student loan payment freeze.
But advocates argue for more action.
Thomas Gokey, organizer of the Debt Collective said that “If Biden starts payments on May Day then we know nearly 8 million peopltheuld be pushed into the default”.
“We don’t have to stop this crisis. We must end it. Joe Biden can cancel all federal student loans with a single signature,” added he.
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