Joe Biden has extended his pandemic-inspired freeze on repaying student loans through January 2022. That should give the radicals just about enough time to cancel repaying all student debt — all $1.7 trillion of it.
I’m sure that’s good news for the 44 million Americans who took out loans to pay for college and especially graduate school. For the rest of us, it’s hard to say. If it encourages more 18-year-olds to take out loans to pay for a degree in rainforest management or classic film studies, it’s probably not a good thing.
The pandemic relief measure to freeze repayment of student loans was to last through September. Biden will extend the freeze for another four months. The reasons are not at all clear. Even with the Delta variant, unemployment is falling through the floor. It’s not like people are going to lose their jobs in the immediate future.
“The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency,” Education Secretary Miguel Cardona said in a statement. “As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for a restart and ensure a smooth pathway back to repayment.”
The “restart” has been going on since May when almost all lockdowns were lifted. As far as a “smooth pathway back to repayment,” that’s nonsense. You either have the money to repay the loan or you don’t.
Republican Rep. Virginia Foxx criticized the administration for further delaying the restart of student loan payments.
“Secretary Cardona is using the permanent pandemic narrative to wield power rather than enact responsible solutions to help borrowers get back on track,” Foxx said in a statement. “I regret that Secretary Cardona did not show real leadership by working with Congress to transition responsibly the portfolio back into repayment by Oct 1 of this year.”
The Education Department estimates that the zero-percent interest on most federal student loans saves borrowers a collective $5 billion each month. But the department has also projected that the freeze on payments and interest has increased the cost of the federal student loan program by roughly $76 billion.
The federal government has paused monthly student loan payments and interest since March 2020 through a combination of legislation, the CARES Act and subsequent executive actions from both the Trump and Biden administrations.
Is no one ever going to pay anything back to anyone ever again? Eviction moratoriums, repayment freezes — how about freezing tax payments or passing a moratorium on bureaucratic red tape? Those reforms would have a huge, positive impact on society and on the economy.
Personal responsibility — accepting that borrowing money must be repaid — has gone out of fashion.