Democrats and GOP Aren’t Satisfied With Biden’s Student-Loan Relief
President Biden extended the pause on student-loan payments for the fourth time, through August 31….
- President Biden extended the pause on student-loan payments for the fourth time, through August 31.
- The GOP slammed the extra relief, saying it would cost taxpayers and hurt the economy.
- Democrats welcomed the news but argued it didn’t go far enough to give borrowers permanent relief.
Student-loan borrowers are likely grateful for the extra four months of relief that President Joe Biden just gave them, but lawmakers in Congress wanted the president to do either more or less.
Leading up to May 1, when student-loan payments had been scheduled to resume, Democrats and Republicans had been pressuring Biden to either extend the payments pause or have borrowers resume paying off their debt.
The president did the former, answering pleas from Democrats and advocates who argued that borrowers did not have enough to foot another monthly bill amid the pandemic and rising inflation.
“This pause will help 41 million people keep up with their monthly bills and meet their basic needs,” Vice President Kamala Harris said in a statement. “It will give borrowers some urgently needed time to prepare for a return to repayment.”
She added that she and Biden “understand that student loan debt adds stress for borrowers and their families.”
So far, Biden has canceled about $17 billion worth of student debt for some groups of borrowers, like those who were defrauded by for-profit schools. While for many the fourth extension of the pause on student-loan payments was a welcome relief, some Republicans and Democrats have said that continually extending the pause is just prolonging uncertainty for borrowers.
Here’s what lawmakers on both sides of the aisle have argued when it comes to broad action on the $1.7 trillion student-debt crisis.
Republican lawmakers slammed the ‘outrageous’ extension of student-loan relief
Republican lawmakers did not hold back about how they felt about extending relief for student-loan borrowers. They cited the $150 billion cost to taxpayers in the form of lost federal revenue with the previous pauses, and they said that cost would grow with further relief.
Rep. Virginia Foxx, the top Republican on the House education committee, called the latest extension “outrageous,” adding that she worried it was “setting the stage for blanket loan forgiveness.”
“Hardworking taxpayers are fed up with having their backs broken by this administration,” Foxx said.
Sen. Richard Burr of North Carolina said in a statement that the Biden administration “wants to have their cake and eat it, too.”
“They want to tout America’s return to normal following the pandemic, but also want to keep extending emergency relief policies,” Burr said. “It’s long past time for student loan repayments to resume as normal. Extending the freeze on student loan repayments, yet again, contradicts reality and exacerbates the moral hazard this Administration has created.”
Some economists have also urged against further student-loan relief. The nonprofit Committee for a Responsible Federal Budget argued in a report in August that the payment moratorium should end, saying it had cost the government $52 billion annually in addition to taxpayer costs.
Larry Summers, a lead economist in the Obama administration, tweeted this week that the extension “is a macroeconomic step in the wrong direction,” describing the approach as “regressive, uncertainty creating, untargeted and inappropriate at a time when the economy is overheated.”
Democrats say student-loan borrowers don’t need ‘quick fixes’
While Democrats say student-loan borrowers need certainty, they don’t think relief must end.
While Biden heeded Democrats’ calls by extending the pause on payments, an additional four months of relief was not quite what those lawmakers were asking for, and they’re pushing the president to implement permanent, meaningful relief.
“I’m glad they took action today, but there’s much more to do,” Sen. Patty Murray, the chair of the Senate education committee, said in a statement. “This pause is urgently needed and will take stress off the shoulders of so many borrowers, but we need long-lasting change and a student loan system that actually works for students and borrowers—not just quick fixes.”
Murray was one of the many Democrats urging Biden to extend the pause through at least 2023 to give him time to fix forgiveness and repayment programs and to use his executive authority to cancel some student debt.
Democrats believe that, contrary to Republicans’ arguments, canceling student debt would stimulate the economy and help low-income borrowers the most. A report from the Roosevelt Institute published last year found that 61% of students from households with incomes up to $30,000 who began college in 2012 graduated with student debt, compared with 30% of students from households with incomes over $200,000.
Given that the “economy didn’t implode” over the two years payments have been paused, as Rep. Mondaire Jones put it last month, Democrats say there’s no reason the government can’t continue to extend that relief.
Rep. Jamaal Bowman of New York tweeted on Wednesday that Biden’s latest payment-pause extension “isn’t enough.”
“Instead of continuously extending the pause under pressure,” Bowman said, “he needs to cancel all student loan debt.”