Yves here. While one can hope this student loan relief measure comes to pass, let us not kid ourselves. Notice the timing of the wavering by Biden, who has been involved with banks so long that it’s highly unlikely that his heart will ever be into debt cancellation, unless it’s heavily means-tested. But Biden or at least his economic advisers must recognized that Manchin tanking BBB in its current form, and in particular having said he would support a deal if the extension of the child care tax credit were out, will hit lower and middle income families promptly. One thing Biden can do quickly to restore some demand in the economy (recall both confidence and personal incomes were already falling before Omicron was stalking the land) even if not to the same people, is to keep the brakes on student loan payments.
So as much as progressives might like to see this shift as a concession to them, it’s just as easy to view it as a way to get more stimulus in the economy and get some credit for it too.
Originally published at Common Dreams
The Biden administration is reportedly considering another extension of the federal student loan payment pause that is set to end on February 1, a shift that comes as the White House is facing growing pressure from progressive lawmakers and grassroots advocates.
Politico‘s Michael Stratford reported Tuesday that the Education Department “says it may postpone” its plan to restart monthly student loan payments early in the new year.
Such a move would be a significant reversal for the administration, which called its August decision to delay the resumption of payments until February 1 “a final extension of the pause on student loan repayment, interest, and collections.”
The Education Department told Stratford that an announcement on the payment pause would come “later this week.” White House Press Secretary Jen Psaki said Tuesday that “the president has not made a decision yet.”
The Debt Collective, a group pushing for the cancellation of all outstanding federal student loan debt, tweeted in response that “an extension to the student loan pause means people can stay in their homes, put food on the table, save for retirement, take their medication or keep their business running.”
“An extension would be a good, popular decision. You should do it,” the group added, directing its post at President Joe Biden. “Then cancel student debt.”
Rep. Ayanna Pressley (D-Mass.) sent a similar message:
This is welcome news and would absolutely be the right call.
Extending the pause will help millions of borrowers and their families weather this ongoing pandemic.@POTUS must extend this critical lifeline & #CancelStudentDebt with the stroke of a pen. https://t.co/K5TFvcSzOu
— Ayanna Pressley (@AyannaPressley) December 21, 2021
Sen. Elizabeth Warren (D-Mass.) also weighed in on the subject Tuesday afternoon.
“Restarting student loan debt payments would take more than $85 billion dollars out of our economy next year,” Warren said in a tweet. “We’re still in a pandemic and people are still struggling. Biden shouldn’t restart payments and should use his authority to #CancelStudentDebt.”
With all due respect, @POTUS — you ran on a promise to cancel student loan debt.
Payments are set to resume in the New Year and our communities are not ready for this. $85 billion will be taken from people’s pockets next year if you don’t act.
Cancel. Student. Debt.
— Congresswoman Cori Bush (@RepCori) December 21, 2021
In recent days, White House officials have publicly indicated that there would not be another extension of the payment and interest pause. Psaki told reporters earlier this month that “a smooth transition back into repayment is a high priority for the administration.”
But amid the surging Omicron variant and continued economic disruptions stemming from the pandemic, progressives have argued that restarting student loan payments would be a colossal mistake, imposing an additional financial burden on millions of people and potentially damaging Democrats’ hopes of keeping control of Congress.
“This makes no sense,” Rep. Ro Khanna (D-Calif.) wrote on Twitter last week. “Instead of raising taxes on the ultra-rich, we are going to make students in debt pay to raise revenue. Awful on the substance and awful politics. We need to do better to deserve victory in 2022.”
The Roosevelt Institute estimated in a recent analysis that federal student loan borrowers were paying an average of $393 each month before the freeze was implemented in March of 2020.
“Covid cases are surging as Omicron rips through our communities. The pandemic is far from over, so the economic relief for it shouldn’t be either,” the Congressional Progressive Caucus tweeted Tuesday. “Extending the student loan pause would absolutely be the right move from the Biden administration—and then move on to canceling them.”