Weather Alert

Canceling student loan debt “still on the table” for Biden administration

Canceling student loan debt through executive action is “still on the table,” said White House press secretary Jen Psaki, after the Biden administration once again delayed the restart of federal student loan payments earlier this month.

The White House has faced continued questions about what the administration will do about the student loan debt crisis since the president took office more than a year ago. Psaki made the remarks during an interview with the podcast Pod Save America in Washington, D.C.

The White House announced last week it was extending the pause of federal student loans through August 31. That pause, which has been in place since the beginning of the coronavirus pandemic, was set to expire on May 1, but had already been pushed back multiple times under first the Trump and then Biden administrations.

“So between now and August 31st, it’s either going to be extended or we’re going to make a decision, as Ron referenced, about canceling student debt,” said Psaki, acknowledging previous remarks by White House Chief of Staff Ron Klain, who said in early April the administration would make a decision before the previous May 1 deadline or extend the pause as well.

Psaki said the president’s preference remains Congress taking action to address student loan debt because it’s more permanent. President Biden has called for legislative action to cancel $10,000 in student loan debt, but action on student loan debt has seen no movement in the closely divided Congress.

Meanwhile, some Democratic lawmakers are calling for the president to cancel $50,000 in student loan debt, arguing Biden has the power to do so immediately.

More than 43 million borrowers now have more than $1.6 trillion in federal student loan debt, according to the Education Department. The average federal student loan debt balance is more than $37,000. Throughout the pandemic, most borrowers have had to make no payments toward their loans. And interest on federal loan balances have been set at 0%.

While most borrowers remain in limbo over whether the administration will cancel student loan debt, the Biden administration has taken some steps to forgive certain student loan debt including for borrowers who were defrauded by their schools, debt held by those with permanent disabilities and through changes to the public service loan forgiveness program. More than $17 billion in student loan debt has been canceled since the president took office.

“Since Day 1, the president has been very focused on making sure we’re protecting our borrowers and putting them first in the conversations and decisions that we’re making,” Education Secretary Miguel Cardona told CBS News on Tuesday.

In announcing that the student loan payment pause would be extended through the end of August, the Education Department also announced it would be giving borrowers who were previously delinquent in student loan payments or in default a “fresh start.” While exactly what the move will look like remains to be seen, Cardona said it would allow borrowers to get back on their feet and make sure there’s no mark on their credit score as they begin to repay their loans.



Connect With Us Listen To Us On