One of the initial actions taken by President Joe Biden was to offer additional relief to Americans burdened by student loan debt. Following his inauguration as the 46th President of the United States, he swiftly moved into the Oval Office to implement his plans.
On his first day, Biden directed the Department of Education to take significant steps to ease the financial strain on borrowers. He signed executive orders that extended the federal student loan payment pause until September 30 and maintained the interest rate on these loans at 0%. This decisive action underscores the administration’s commitment to addressing the nation’s staggering $1.6 trillion student debt crisis, as promised during Biden’s campaign.
The decision to prolong the student debt freeze was part of a suite of 17 executive actions taken on his first day, many aimed at alleviating financial hardship intensified by the COVID-19 pandemic. Alongside this extension, Biden also ordered a continuation of the federal moratorium on evictions and foreclosures, providing much-needed relief to countless Americans facing economic challenges.
While the student loan pause was initially discussed in the COVID relief bill passed by Congress in December, it was ultimately excluded from the final version. Without the Biden administration’s intervention, federal loan payments were slated to resume by the end of January. Over 40 million Americans carry federal student loan debt, with about 20% currently in default, as reported by the Department of Education. A survey by Pew in November indicated that nearly 60% of borrowers felt it would be “somewhat” or “very difficult” to resume payments.
During his campaign, Biden pledged to take action against the student debt crisis, though the specifics of his approach are still unfolding. His proposal includes supporting a $10,000 reduction in federal loans for all borrowers, but some members of his party advocate for more extensive forgiveness. For instance, Senator Elizabeth Warren is pushing for $50,000 in forgiveness per borrower, while Senator Bernie Sanders aims for complete cancellation of federal loans.
On a positive note, Biden appointed Miguel Cardona as his education secretary, who brings two decades of teaching experience, contrasting sharply with the previous administration’s choice, Betsy DeVos, who lacked any teaching background. This change could signal a more favorable future for American students.
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In summary, the Biden administration’s move to extend the student loan payment pause through September is a significant step in addressing the ongoing student debt crisis. With a focus on relief for borrowers and a new education secretary who values educational experience, there seems to be a commitment to improving the financial landscape for American students.