3 Big Takeaways From Biden’s Surprise Extension Of Student Loan Relief

WASHINGTON, DC – DECEMBER 21: U.S. President Joe Biden speaks about the omicron variant of the … [+] coronavirus in the State Dining Room of the White House, December 21, 2021 in Washington, DC. (Photo by Drew Angerer/Getty Images)


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On Wednesday, President Biden announced an extension of the ongoing federal student loan payment pause to May 1, 2022. Here are the biggest takeaways for borrowers.

Biden’s Extension Of the Student Loan Pause Was Unexpected

Payments, interest accrual, and collections efforts on most federal student loans have been suspended now for 21 months, following Congress’s passage of the CARES Act in March 2020. That legislation originally called for six months of relief, but President Trump and President Biden have used executive authority to extend the pause several times.

Biden’s prior extension of the student loan pause was set to end on January 31, 2022. And administration officials had gone to great lengths to characterize that extension as the “final” one, repeatedly rejecting calls by advocates and progressives in Congress to extend it further. The Department of Education has also been sending mass emails to borrowers for weeks, warning them of the imminent return to repayment. As recently as last week, White House officials deflected calls for a further extension and said the Education Department was focusing on a “smooth transition to repayment” in February.

But with inflation soaring and Covid cases sweeping the country, and a chorus of advocacy groups and Democrats in Congress urging officials to act, the Biden administration abruptly shifted this week, and opted to allow for an additional 90-day extension.

“I appreciate everyone who organized and pushed President Biden to take action, and I’m grateful he listened to our call,” said Senator Elizabeth Warren (D-MA) in a tweet on Wednesday. Warren has been one of the leading voices in Congress calling on Biden to extend student loan relief. “Extending the student loan payment pause is a major relief for millions of Americans during this pandemic.”

The Word “Final” Is Missing From President Biden’s Statement on the Latest Extension of Student Loan Relief

When Biden previously extended the student loan pause to January, statements from administration officials on the day of the announcement emphasized that this would be the “final” extension of relief. Subsequent communications by administration officials, and written guidance provided by the Department of Education for borrowers, also repeatedly included the word “final” when describing the extension.

Biden released a detailed statement on Wednesday announcing the new extension of student loan relief to May 1. But the word “final” is nowhere in that statement. Parsing the words of elected officials is often a futile endeavor, but the absence of the word is noteworthy. At a minimum, it may reflect a recognition by administration officials that circumstances can change rapidly, particularly during a once-in-a-century global pandemic, and it may be best to keep options open.

But it does not necessarily mean there will be a further extension of relief after May 1. At the end of his statement, Biden emphasized that borrowers should be taking steps to prepare for the resumption of repayment next year. “As we are taking this action, I’m asking all student loan borrowers to do their part as well: take full advantage of the Department of Education’s resources to help you prepare for payments to resume; look at options to lower your payments through income-based repayment plans; explore public service loan forgiveness; and make sure you are vaccinated and boosted when eligible.”

Calls Grow For Biden To Enact Broad Student Loan Forgiveness

Advocates for student loan borrowers applauded President Biden yesterday for extending the student loan payment pause, and many pointed out that sustained organizing and messaging on student loan relief paid off. But borrower advocacy groups also made clear that they will escalate their campaign to convince Biden to enact widespread student loan forgiveness.

“Next, the Biden administration should permanently relieve this financial burden on families and the economy by using his executive authority to eliminate all federal student debt,” said Braxton Brewington, spokesperson for the Debt Collective, a debtor’s union and advocacy group for student loan borrowers. “With the stroke of a pen, Biden can dramatically boost the economy, narrow the racial wealth gap, keep a key campaign promise and deliver a much needed Jubilee.”

“Although we commend the administration for delivering this necessary, short-term relief to people with student debt, we continue to advocate for the extension of the pause on student loan payments until the end of the COVID-19 national emergency, giving the Department of Education time to fix the broken student loan system and finally keep the president’s promise to cancel student debt,” said Mike Pierce, executive director of the Student Borrower Protection Center in a statement. “Borrowers must be granted the relief they deserve.”

Key Democrats in Congress echoed these sentiments. “We’re pleased the Biden administration has heeded our call to extend the pause on student loan payments,” said Senate Majority Leader Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA), and Rep. Ayanna Pressley (D-MA) in a joint statement. “We continue to call on President Biden to take executive action to cancel $50,000 in student debt, which will help close the racial wealth gap for borrowers and accelerate our economic recovery.”

For nearly a year, activists, advocacy organizations, and many Democrats in Congress have been urging President Biden to use executive action to cancel upwards of $50,000 in student loan debt for every borrower, which they argue is allowable under key federal statutes governing federal student aid programs that give the Secretary of Education broad authority. While Biden campaigned on forgiving $10,000 in federal student loan debt for borrowers, he has expressed skepticism that he has the legal authority to act unilaterally, without Congress, and he has said he opposes $50,000 in student loan forgiveness. White House officials have said Biden would readily sign a student loan forgiveness bill passed by Congress, but student loan relief is largely absent from the infrastructure and social spending proposals that congressional Democrats are currently focused on.

Meanwhile, the administration has already used executive action to grant nearly $12 billion in new federal student loan forgiveness by expanding existing programs, and officials have indicated it is still exploring options for additional action.

Further Student Loan Reading

It’s Official: Biden Extends Student Loan Pause To May 2022 — What Borrowers Should Know

Biden Official: We’re ‘Just Getting Started’ On Student Loan Forgiveness. What Does That Mean?

Student Loan Interest: Agreement Reached To Curtail Some Runaway Balance Increases

Big Changes Coming To Student Loan Repayment In 2022