Student loans

Biden faces growing pressure on student loans with looming deadline

President Biden is in a tough spot on student loans ahead of the midterms as pressure mounts from borrowers and Democrats for widespread cancellation.

A key deadline adds to the pressure: On May 1, millions of borrowers will have to pay unless the freeze on federal student loan repayments put in place during the pandemic is extended.

Biden has been called on to extend the freeze into next year – beyond the midterms.

But pardon advocates, as well as leading Democrats, want more than another freeze.

“We’ve been saying for years that we need to keep payments on hold until we cancel student debt,” said Natalia Abrams, president and founder of the Student Debt Crisis Center (SDCC).

Biden last extended the suspension in December. Loan repayments were first suspended in March 2020 under former President Trump and have since been extended five times.

A growing number of Democrats are calling for another extension, increasing pressure on the White House.

“I hope the president will act,” Sen. Cory Booker (DN.J.) told The Hill this week. “It’s something that’s been extraordinarily popular, not just with people with student loans, but with families of people going to college.”

On Friday, White House press secretary Jen Psaki said a decision had to be made before May. She said the administration “will consider the impacts of economic data on ranges of groups of people, including students.”

In 2020, Biden was one of many Democratic presidential candidates who called for widespread cancellation of federal student loans.

The number of student borrowers has risen sharply over the past two decades. According to Peter G. Peterson Foundationfederal student debt increased sevenfold, from $187 billion to $1.4 trillion, between 1995 and 2017.

The Federal Reserve estimated Last year that approximately $1.7 trillion in student loan debt had been accumulated by borrowers nationwide.

Biden in the campaign supported forgiving at least $10,000 in federal student loans per person. Others, including Senate Majority Leader Charles Schumer (DN.Y.), have demanded $50,000 per borrower or to forgive the debt entirely.

Democrats warn that inaction could cost them dearly in November, when the party tries to hold onto majorities in the House and Senate.

Rep. Ilhan Omar (D-Minn.), who has called on Biden to wipe out “all student debt” in the past, said this week she thinks “inaction is going to be really dangerous for us halfway through. “.

“The enthusiasm is really low,” Omar said of Democratic voters. She added that “it is important to listen to the people who sent us to represent them, then us, and I know that the cancellation of student debt is a priority”.

Senate Health, Education, Labor and Pensions Committee Chair Patty Murray (D-Wash.) Called last month to extend the freeze through 2023. Since then, nearly 100 Democrats of both chambers also pushed for the extension, citing inflationary loan holders. are faced.

“We are certainly hearing from borrowers who will change their voting preferences and perhaps not vote at all due to failed student loan forgiveness,” said SDCC executive director Cody Hounanian.

House Progressive Caucus leaders raised the issue with Biden during a meeting on Wednesday. Rep. Mark Pocan (D-Wis.), who was in attendance, said members discussed potential next steps, including “possible cancellation, possible expansion of some of the programs we’re already running, and refunds.” .

“The president is very aware that it’s important for a lot of people who are just trying to get by and the good news is we’ve had a really good conversation about that and a lot of other, I think, things. essential portfolio issues,” he said. noted.

Biden in April requested a memo from the Department of Education to determine his authority to cancel student debt through executive action. Since then, the administration has not publicly announced whether the memo is complete.

The White House, when asked to comment, pointed to the “breathing room” the pause has given borrowers. He also noted that no one has paid federal student loans since Biden took office.

“The Education Department will continue to work to ensure a smooth transition to repayment in May. The President is supporting Congress with $10,000 in debt relief. And he continues to consider what relief measures debt can be taken administratively,” a White House official said.

A Department of Education spokesperson told The Hill that easing the burden of student debt is a key priority. The administration is “committed to providing the necessary relief and to achieving our ultimate goal of making college more affordable on an ongoing basis,” the spokesperson added.

The ministry said it will continue to communicate with departments and borrowers about repayment updates.

The Biden administration has reportedly told businesses in recent weeks not to send notices about resuming student loan payments.

Jared Bernstein, a member of the Council of Economic Advisers, acknowledged that student borrowers “face real challenges in paying off their debts,” when asked at the White House press briefing on Friday if borrowers were ready. to resume their payments.

Bernstein also noted that White House Chief of Staff Ron Klain has already “looked into this” issue. Klain signaled in early March that the White House would extend the student loan repayment freeze.

But advocates argue that more action is needed.

“If Biden restarts payments on May 1, we know nearly 8 million people will be in default,” said Debt Collective organizer Thomas Gokey.

“We don’t need to stop this crisis, we need to end it. Biden can cancel all federal student loans with a signature,” he added.

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