Student loan payments were paused at the onset of the COVID pandemic and have not resumed since, giving borrowers a financial reprieve as the economy collapsed around them. However, loan payments are scheduled to resume either 60 days after the Supreme Court issues a ruling on Biden’s student debt forgiveness program or 60 days after June 30. Either way, the deadline is fast approaching for millions of borrowers.
Student loan payments were to resume in the past – and didn’t. On nine occasions, the repayment pause has been extended. Nine times. Most recently, Biden said that repayments would resume at the beginning of 2023. Obviously, they did not. So, could Biden extend again? The White House has been mum on the prospect of another repayment extension, but “experts believe yet another extension of the loan payment pause is a possibility.”
“I definitely think this is on the table,” Hofstra University professor Rebecca Natow said.
Political Ramifications for Joe Biden
The millions of Americans who have had their loan repayments paused are all of voting age. Joe Biden knows this. And Biden knows that few things can irritate voters more than sending them a new (old) bill.
“From a political standpoint, this is popular among a cross section of voting demographics, and that should always be a consideration going into a presidential election year,” Democratic strategist Rodell Mollineau said.
The thing is, after three years without collecting in student loan repayments, the federal government is still functioning – almost as if nothing happened at all; almost as if it doesn’t exactly need the loans repaid.
There’s no functionality to adhering to repayment. Instead, what it comes down to, motivating the repayment push is a misguided principle and garden-variety greed. The principle is that borrowers entered into a legal agreement to pay back the loans and that now, the borrowers need to hold up their end of the bargain.
Well, student loans are offered and lent in something of a predatory scheme, to eighteen, nineteen, and twenty-year-olds who in many cases don’t really understand what they’re doing; eighteen, nineteen, and twenty-year-olds indoctrinated within a culture that pushes young people toward college, even as tuition prices rise astronomically, and the return on investment on higher education plummets.
Most student loan borrowers are barely above the age required to enter into a legal contract, yet they’re committing themselves to decades worth of debt without institutional oversight. I’d say that’s a pretty flawed principle.
And what Biden, Democrats, and Republicans should appreciate is that they aren’t choosing between collecting student loan repayments and pausing student loan repayments. In many respects, the choice is actually between pausing student loan repayments or enforcing student loan repayments that still won’t be repaid; in many cases, student loans aren’t going to be repaid whether or not the government holds out its hand to collect. It’s just not going to happen.
People don’t have the money. Or they’ve grown accustomed to the three years without repayments and have adjusted their budgets accordingly. Or the generationally high inflation has cut into their ability to pay.
Whatever the reason, student loan debt is the most common type of debt amongst young people and that situation will only exacerbate if Joe Biden allows repayments to resume.
Harrison Kass is the Senior Editor at 19FortyFive. An attorney, pilot, guitarist, and minor pro hockey player, Harrison joined the US Air Force as a Pilot Trainee but was medically discharged. Harrison holds a BA from Lake Forest College, a JD from the University of Oregon, and an MA from New York University. Harrison listens to Dokken.