Jul 22, 2022
The Biden Education Department has reportedly decided to delay its rollout of a proposal to slash monthly payments for low-income federal student loan borrowers, a move that comes as millions of debt-saddled people across the U.S. brace for the end of the repayment moratorium on August 31.
Politicoreported late Thursday that the administration "had expected to unveil this month its plan for a new income-driven repayment program, which President Joe Biden advertised on the campaign trail as a more 'generous' option for borrowers that would cut monthly payments in half for some."
"It is reckless and cruel to throw borrowers back into a broken student loan system."
According to Politico, "Education Department officials insist they're still on track for the new loan repayment plan to go live next summer."
Persis Yu, policy director at the Student Borrower Protection Center, said in response to the delay that "once again, distressed federal student loan borrowers are left waiting for President Biden to make good on his promise of delivering relief."
"Income-driven repayment (IDR) is meant to protect the lowest income borrowers and those experiencing financial hardship from the devastating impacts of default," said Yu. "Instead, IDR has trapped millions of borrowers in ballooning and inescapable debt."
Yu added that the Biden administration's failure to "deliver a finalized IDR rule by November 1st means that borrowers will either need to wait another year for the promise of a truly affordable repayment option or imperil their financial wellbeing as the Department and its servicers--with their history of incompetence and abuse--rush to implement yet another repayment plan."
"This delay is further evidence of a dysfunctional student loan system," she continued. "The president must provide broad cancellation for all federal student loan borrowers, and the payment pause must be extended in coordination with the IDR Adjustment, the Public Service Loan Forgiveness (PSLF) Waiver, and new regulations. It is reckless and cruel to throw borrowers back into a broken student loan system."
News of the delay emerged as borrowers continued to await Biden's decision on more broad-based student debt cancellation, which has also been pushed off repeatedly as the administration mulls how much to wipe out and whether to means-test the relief. Debt cancellation advocates have accused the Biden administration of deliberately dragging its feet and suppressing a memo about the president's authority to cancel student debt without congressional approval.
Earlier this month, the Biden administration proposed a series of changes to existing--and deeply flawed--student loan programs, including a rule aimed at lowering interest rates for borrowers.
On the campaign trail, Biden promised to cancel $10,000 in student debt per borrower, but advocates and progressive lawmakers are demanding much more. Some are calling for at least $50,000 in debt relief per borrower while others are demanding nothing less than the total cancellation of all $1.6 trillion in outstanding federal student loan debt.
"In just over a month, student loan payments are set to resume," Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, said earlier this week. "It's time to cancel student loan debt and deliver relief for millions of borrowers across this country."
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