Student loan holders get piecemeal relief from Biden administration
The Biden administration plans to extend the pandemic freeze on student loan payments to Americans beyond its scheduled expiration in September and look to piecemeal measures to lower their student debt bills.
Five months into his tenure, President Biden has resisted calls from fellow Democrats and activists to write off most of the US $ 1.6 trillion in federal student loan debt all at once through d ‘executive action. Congress also seems unlikely to happen because Democrats lack the Republican backing they would need to pass such a measure.
Yet many Americans are actually seeing their debt bills reduced thanks to policy changes that began under the Trump administration, which froze student loan payments when the pandemic began to unfold in March 2020. The decision, that the Biden administration extended until September, in fact forgave tens of billions of dollars in student debt that families would otherwise have paid off, mostly by waiving interest charges.
Mr Biden’s Education Secretary Miguel Cardona told a congressional panel last month that the administration was considering extending the payment freeze beyond September. When asked about the possibility, an administration official said that Mr Biden “continues to examine what debt relief measures can be taken administratively.” The official reaffirmed Mr. Biden’s desire for Congress to pass legislation to write off $ 10,000 in student debt for every federal borrower. Lawyers for the administration are investigating whether the president has the power to write off the debt through executive action, the official said.
Last month, the Education Department wrote off $ 500 million in student debt owed by thousands of former students at the late ITT Technical Institute, which federal regulators have accused of financial mismanagement and deceptive recruiting tactics. The ministry said it would take action later this year to change federal rules to allow more aggrieved borrowers who attended other for-profit schools to have their debt canceled.