I Think I Know The Date Biden Plans To Cancel Federal Student Debt: Never
Progressives have had mixed emotions about Biden's announcement that he's going to-- grudgingly-- continue a moratorium on federal student loan payments through the end of January. Progressive congressional candidate Alexandra Hunt (Philadelphia) spoke for most progressives running for office when she noted that "Education is a human right, yet generations of Americans are grappling with student debt. We grow up in a society that pushes us to higher education and upon pursuit of that path, we’re burdened for decades with student debt repayment. Don’t we want a country filled with educated people coming up with the best and brightest ideas? Education is the backbone to a healthy democracy. Student debt is a major tool that is contributing to class maintenance and a lack of economic upward mobility for our younger generations. It’s fascist in design. If President Biden truly believes he was elected to save the 'soul' of this country, his actions surrounding student debt cancellation will determine if his presidency is up for the task."
Yesterday, Erica Green reported that the Education Department warned "that this would be the 'final extension' of the pause, which the Trump administration instituted in March 2020 at the outset of the coronavirus pandemic, and that the additional time would allow the agency to transition borrowers back into repayment and reduce the risk of default and delinquency. More than 40 million borrowers have federally held loans, and during the moratorium, they have been interest-free and not subject to repayment or penalties for nonpayment... Several Democratic leaders in Congress had pressed the Biden administration over the summer to continue the student loan pause, saying that the fast-approaching expiration was ill-timed considering that millions were still suffering financial hardship from the pandemic... The Federal Reserve Bank of New York estimated that the pause had saved borrowers $7 billion per month in payments during the pandemic... and the Education Department estimated that borrowers saved about $5 billion per month on loan interest."
Like Hunt, northwest Washington congressional candidate Jason Call doesn't think an extension is what's call for and is campaigning on debt cancellation. He told me this morning that he's "thankful that millions of debt holders will receive a little more temporary relief from their 'obligation' to a predatory banking system, but once again a woefully inadequate half measure from the Biden administration which cynically and sadly can’t figure out whether it has the authority to cancel student debt. Can’t figure out whether it can overrule a parliamentarian. Can’t figure out whether it should overturn a filibuster or expand the highest judicial body. You know what it can figure out? When to exercise drone strikes in Somalia. Nothing new under the sun for a president who was an architect of the very law that made it impossible to shed student loan debt through bankruptcy-- a law also strongly supported by WA-02 austerity hawk Rick Larsen (and the pivotal law that set me on the path to challenging his seat). Not surprisingly, while so many are being crushed by this $1.7 trillion in student debt, the idea of cancellation has in my experience been poorly received among the performative liberal longtime rank and file Democrats who wail 'it’s not fair! We had to pay our debt!' while failing to recognize that when they went to college they were paying comparatively next to nothing for their higher education. Biden’s inaction on cancellation of even a watered down proposal of $10,000 belies once again that the corporate wing of the party cares little for the struggles of working people in this failing capitalist economy, as if the purpose of the system were indeed to crush the masses with exploitative debt. Student debt was around $350 billion in 2005 when the Bankruptcy Act passed. It jumped 23% the following year, by far the largest ever increase, and set the creditors on yet another course to massive profits buoyed by an institution that should exist for public benefit and as an investment in the well being of generations. Seems we will never learn to put people over profit. Cancel student debt now."
If you'd like to see members of Congress like Jason Call, Steven Holden and Alexandra Hunt working in Washington, please consider using this thermometer to contribute what you can to their campaigns. That NY Times story from yesterday went on to remind readers that Richard Burr (R-NC), the ranking member on the Senate Education Committee, comes from a very different place-- a place that corporate Democrats like Biden feel much more comfortable with. Burr "co-wrote a June letter opposing an extension, [saying] there was 'no rational excuse' for another extension, which he said would cost an estimated $20 billion on top of $76 billion already spent.
[T]he Education Department emphasized that January 2022 was a “definitive end date”-- this will be the fourth extension since the pandemic began-- as the Biden administration faces mounting pressure from Democrats to erase up to $50,000 in federal student loan debt.
An official familiar with the department’s plans said that the January expiration date was based on financial aid cycles and delinquency patterns, and that the emphasis on its finality was intended to give borrowers more certainty than the rolling extensions have provided. The department is also preparing for the departure of major loan servicers-- including the Pennsylvania Higher Education Assistance Agency, known as PHEAA, which handles millions of accounts-- and will use the four months to transition.
The announcement drew cheers from advocates for student borrowers.
Persis Yu, director of National Consumer Law Center’s Student Loan Borrower Assistance Project, said there were “too many moving parts to successfully start federal student loan repayment,” citing the loan servicer shake-up.
“Borrowers are collectively taking a huge sigh of relief at the news that the federal student loan payment pause has been extended once again,” Ms. Yu said in a statement. “The student loan system is not ready to resume repayment on Oct. 1, and President Biden has made the right decision to postpone repayment.”
The extension is likely to amplify calls for the Biden administration to cancel student loan debt outright.
In a joint statement, Senator Chuck Schumer of New York, the majority leader, Senator Elizabeth Warren of Massachusetts and Representative Ayanna Pressley of Massachusetts-- all Democrats who have urged Mr. Biden to cancel student loan debt by executive order-- said the pause “provided an enormous relief to millions of borrowers facing a disastrous financial cliff” but didn’t go far enough.
“Our broken student loan system continues to exacerbate racial wealth gaps and hold back our entire economy,” the statement said. “Student debt cancellation is one of the most significant actions that President Biden can take right now to build a more just economy and address racial inequity. We look forward to hearing the administration’s next steps to address the student debt crisis.”
Steven Holden is the progressive Democrat running in Central New York (Syracuse) for a seat held by conservative Republican John Katko. "As someone with three children who have graduated college," he told me this morning, "I know the burdens cast upon this generation. My children, who also received scholarships and aid due to my military service, still had to get FAFSA (Federal Financial Aid). They are foregoing having families and buying houses due to crushing debt. I also do not believe in 'pulling the ladder up.' Even with full-ride scholarships, I still had student loans as well, and I paid mine off. I also understand how predatory that industry is. President Biden has the authority to eliminate student debt, and we have the money to pay for Post-Secondary education. As a fellow Alum of Syracuse University, I ask him to sign an executive order to eliminate this debt and invest in our future. It will have an immediate economic impact, and be a boon to new home sales, which is a leading indicator of economic growth. I also ask the Department of Justice to investigate Betsy DeVos and her double-dealing while as Secretary of Education and owning a student loan debt collection company. When I get to Congress, I can assure you that I will."