President Joe Biden announced Wednesday that his administration is extending the soon-to-lapse pause on student loan payments until May 1, staving off--at least for several months--a potential financial disaster for tens of millions of borrowers amid the ongoing coronavirus pandemic.
"With the stroke of a pen, Biden can dramatically boost the economy, narrow the racial wealth gap, keep a key campaign promise."
"This is a major win for 45 million student debtors and their families," Braxton Brewington, spokesperson for the Debt Collective, said in response to the president's announcement, which came after weeks of sustained pressure from grassroots advocates and progressive lawmakers.
The payment freeze was set to end on February 1, and the White House resisted calls to extend the deadline for weeks before finally relenting on Wednesday. Private companies that manage federal student loans have been lobbying aggressively against the moratorium in recent months.
"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 ," Brewington added. "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 for the 99%."
In a statement , Biden pointed to the surging Covid-19 pandemic and continued "economic upheaval" as reasons to extend the payment freeze for an additional 90 days. However, in the final paragraph of his statement, the president signaled that he does not intend to heed progressives' demands for broad-based student debt cancellation.
"As we are taking this action," Biden said, "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."
Sen. Elizabeth Warren (D-Mass.), who for months has been pressuring Biden to cancel at least $50,000 in student loan debt per borrower, said Wednesday that "extending the student loan payment pause is a major relief for millions of Americans during this pandemic."
"I appreciate everyone who organized and pushed President Biden to take action, and I'm grateful he listened to our call. Next, President Biden should cancel student debt."
Rep. Ayanna Pressley (D-Mass.), another leading advocate of student debt cancellation, echoed that call:
\u201cGrateful the administration has heeded our calls to extend this critical lifeline, which will help millions make ends meet while we overcome Omicron.\n\nNext, @POTUS must #CancelStudentDebt to boost the economy & help close the racial wealth gap. \n\nLet's get this done!\u201d— Congresswoman Ayanna Pressley (@Congresswoman Ayanna Pressley) 1640194558
Biden's announcement came hours after a new survey showed that nearly half of U.S. federal student loan borrowers are "not at all confident" in their ability to make payments beginning in February, a finding that advocacy groups cited as yet another reason for the administration to extend the freeze, which began in March of 2020 and has saved borrowers tens of billions of dollars .
Conducted by the progressive think tank Data for Progress between December 15 and 21, the poll indicates that fewer than one in seven people with federal student debt are "very confident" in their ability to cover their loan payments.
"Student loan borrowers need the Biden administration to have their backs."
Borrowers who reported the highest confidence in their ability to make loan payments, according to the new survey, were recipients of the boosted child tax credit, a program that is set to expire at the end of December unless Congress overcomes Sen. Joe Manchin's (D-W.Va.) obstruction and approves the Build Back Better Act.
"Tens of millions of people with student debt are facing a financial catastrophe in the New Year, as Omicron sets new records and Congress yanks a financial lifeline from working families," Mike Pierce, executive director of the Student Borrower Protection Center, said in a statement .
The new poll, added Pierce, "shows that student loan borrowers need the Biden administration to have their backs. Time is running out."
Lindsay Owens, executive director of the Groundwork Collaborative and Fighting Chance for Families, noted that "without immediate action by the Biden administration to extend the pause on student loan payments, millions of student loan borrowers with children will be forced to make an average of $400 in monthly student loan payments at the same time as they lose an average of $400 in direct financial support from the federal government."
"American families will also be asked to shoulder this burden against a backdrop of record-setting increases in prices for basic goods," she warned.
Senate Majority Leader Chuck Schumer (D-N.Y.)--who has joined Warren, Pressley, and other lawmakers in demanding at least $50,000 in student debt cancellation-- said Wednesday that "it's good [Biden] extended the pause on student loan payments amid Omicron."
"Now," Schumer added, "he needs to cancel student debt to help close the racial wealth gap and provide relief to so many."