Progressive politicians and groups representing borrowers have taken the position that enough is enough after more than two years of deferments, saying the repeated extensions show that Biden should proceed with his campaign proposal to forgive student debt. Biden called for $10,000 per borrower in forgiveness when he ran for president in 2020. The latest pause is meant to give borrowers some more breathing room, since recent research by the Federal Reserve Bank of New York shows that many would be in financial trouble if forced to resume payments. It’s also meant to give the Department of Education time to get better organized. Student loan advocates and regulators have pointed out flaws in the management of student loan repayment programs, including income-driven repayment plans for low-income borrowers and the Public Service Loan Forgiveness program. The latter was recently expanded by the Biden administration to make many more public servants eligible for forgiveness. “Today’s announcement was long overdue—in less than a month, tens of millions of people with student debt faced a financial catastrophe in the making,” Mike Pierce, executive director of the Student Borrower Protection Center advocacy group, said in a statement. “The Administration deserves credit for finally giving people room to breathe but today’s news should also be a reminder that the student debt crisis continues to loom over the financial futures of families across the country.”Meanwhile, critics have said the pause and any potential forgiveness for borrowers is unfair to people who don’t have federal student loans. Americans for Tax Reform, a conservative group, said the student loan pause has helped high-income, highly educated borrowers while stoking inflation that has hurt people with low incomes. An analysis by the Committee For a Responsible Federal Budget, an anti-deficit think tank, said cancellation would make already-soaring inflation even worse. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
