President Joe Biden and his team have been working overtime to convince the American people that the economy has successfully recovered in full from the negative impacts of the coronavirus and governmental responses to the pandemic.
Yet, the economy apparently hasn’t recovered quite enough for those with federal student loan debt to resume making payments, as Biden just extended the pause on repayment of such loans for another five months, Fox Business reported.
The extended moratorium on federal student loans means that, at least until the new date of August 31, no payments are required, no interest will accrue, and no collections efforts will be made. All of that had been set to resume on May 1.
The pause had first been implemented in March 2020 on an emergency short-term optional basis by then-President Donald Trump but was later broadened and cemented by Congress and had since been extended twice under Trump and now three times under Biden.
Extension granted until August 31
President Biden announced the extension of the pause on federal student loan debt repayment with a statement Wednesday that noted that “as I recognized in recently extending the COVID-19 national emergency, we are still recovering from the pandemic and the unprecedented economic disruption it caused.”
“If loan payments were to resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship, and delinquencies and defaults could threaten Americans’ financial stability,” the president continued.
Thus, the extension of the pause until August 31, which Biden claimed would “will assist borrowers in achieving greater financial security and support the Department of Education’s efforts to continue improving student loan programs.”
Education Sec. Miguel Cardona issued a statement of his own announcing the extension of the federal student loan repayment moratorium and expressed his department’s commitment to “ensuring that student loan borrowers have a smooth transition back to repayment.”
This additional extension will allow borrowers to gain more financial security as the economy continues to improve and as the nation continues to recover from the COVID-19 pandemic. It remains a top priority for the Biden-Harris Administration to support students, families, and borrowers — especially those disproportionately impacted by the pandemic. During the pause, we will continue our preparations to give borrowers a fresh start and to ensure that all borrowers have access to repayment plans that meet their financial situations and needs.
A mess that will benefit some at the expense of others
Bloomberg News reported on the “life-changing” relief that some individuals had received via the moratorium, such as shifting funds that would have gone to loan payments to instead pay down other debts or establish savings for the future or a home.
But not everybody with federal student loan debt has been so wise with their money in the interim, and the perpetually extended pause has only emboldened the radical leftist demands that all student loan debt be forgiven — actually, paid for by taxpayers — which is inherently unfair to those who already paid their student loan debts in full or managed never to become indebted with student loans in the first place.
With each additional extension of the pause, it seems more and more likely that some sort of debt cancellation or forgiveness will eventually be implemented and millions of Americans who willingly signed on to receive those loans will unfairly be able to dodge their lawful obligation to repay those funds in full.