Hundreds of millions of Americans who are struggling under student debt may soon find out what the Biden administration has decided to do, if anything, on forgiveness.
The pandemic-era relief that has been in effect for over two years is due to end on August 31. With that in mind White House press secretary Jen Psaki said at Monday’s press briefing, “Not a single person in this country has paid a dime on federal student loans since the president took office,” referring to the financial relief bills on student loans and that the administration, “would make a decision about any cancellation of student debt before the conclusion of that pause on student loans.”
The country’s $1.7 trillion outstanding education debt was more of a problem for families than credit card or automobile debt. Additionally, Repayment difficulties were widespread among student loan borrowers even before the public health disaster. Delinquency or default issues were the case for roughly a quarter of student loan borrowers — or 10 million people.
Experts believe that the public health emergency has only worsened the problem’s financial consequences. According to a recent survey, borrowers with student loans were 16 percent more likely to miss a payment if the payment pause ended.
Although Biden has expressed skepticism about sweeping student loan forgiveness in the past, at a Congressional Hispanic Caucus Monday, the president stated he was looking for ways to provide student debt forgiveness.
The pressure is on for the president to act prior to the midterms, with Democratic and taxpayer advocates emphasizing that student debt cancellation is a campaign promise he can fulfill without Congress while much of his agenda has been blocked in the House and Senate. However, there are debates amongst lawyers whether the president can grant executive orders on debt forgiveness.
Conversely, those who oppose student loan forgiveness argue that the policy unfairly shifts the burden of paying off loans to taxpayers and that it penalizes Americans who didn’t go to college, never borrowed or paid their debts.