Student borrowers are likely to be thankful for the extra four months of relief President Joe Biden has just given them, but lawmakers in Congress have wanted the president to do more or less. By May 1, when student loan repayments were scheduled to resume, Democrats and Republicans were pressuring Biden to either extend the moratorium or repay borrowers to pay off their debt. The president did the first, responding to calls from Democrats and supporters who argued that borrowers did not have enough to pay another monthly bill amid the pandemic and rising inflation. “This pause will help 41 million people keep up with their monthly bills and meet their basic needs,” Vice President Kamala Harris said in a statement. “It will give borrowers an urgently needed time to prepare for repayment.” She added that she and Biden “understand that student loan debt adds stress to borrowers and their families.” So far, Biden has canceled about $ 17 billion in student debt for certain groups of borrowers, such as those who have been deceived by for-profit schools. While for many the fourth extension of the student loan pause was a welcome relief, some Republicans and Democrats said the continued extension of the pause only prolongs uncertainty for borrowers. Here’s what lawmakers have said on both sides of the aisle when it comes to large-scale $ 1.7 trillion student debt crisis action.
Republican lawmakers criticize ‘outrageous’ extension of student loan relief
Republican lawmakers have not interrupted how they felt about extending relief to student borrowers. They cited the $ 150 billion cost to taxpayers in the form of lost federal revenue from previous layoffs and said the cost would increase with further relief. Virginia Fox, a leading Republican on the House Education Committee, called the latest extension “outrageous,” adding that she was concerned that it was “creating the ground for a general debt forgiveness.” “Hard-working taxpayers are tired of having their backs to this administration,” Foxx said. North Carolina Sen. Richard Burr said in a statement that the Biden administration “wants to have its cake and eat it as well.” “They want to support America’s return to normalcy after the pandemic, but they also want to continue to expand emergency relief policies,” Burr said. “It has been a long time since student loan repayments resumed normally. The extension of the student loan repayment freeze, once again, runs counter to reality and exacerbates the moral hazard posed by this administration.” Some economists have also called for no further easing of student loans. The nonprofit Federal Budget Committee said in a report in August that the moratorium on payments should end, saying it cost the government $ 52 billion a year in addition to taxpayer costs. Larry Summers, the Obama administration’s chief economist, wrote on Twitter this week that the extension “is a macroeconomic step in the wrong direction,” describing the approach as “a setback that creates uncertainty, misplaced and inappropriate at a time when the economy overheats. “
Democrats say student loan borrowers do not need ‘quick fixes’
While Democrats say student loan borrowers need reassurance, they do not believe the relief should end. As Biden listened to Democrats calling for an end to the pay cut, an additional four months of relief was not exactly what lawmakers were asking for, and they are pushing for a permanent, substantive relief. “I’m glad they took action today, but there is still a long way to go,” said Sen. Patty Murray, chair of the Senate Education Committee. “This pause is urgently needed and will take the stress off the shoulders of so many borrowers, but we need long-term changes and a student loan system that really works for students and borrowers – not just quick fixes.” Murray was one of many Democrats who urged Biden to extend the moratorium until at least 2023 to give him time to rectify his pardon and repayment plans and to use his executive power to cancel a student debt. Democrats believe that, contrary to Republicans’ arguments, canceling student debt would boost the economy and help low-income borrowers more. A report by the Roosevelt Institute published last year found that 61% of students from households with incomes up to $ 30,000 who started college in 2012 graduated with student debt, compared with 30% of students from households with an income of over 200,000 $. As the “economy has not collapsed” in two years, payments have stalled, as MP Mondaire Jones said last month, Democrats say there is no reason the government could not continue to extend that relief. . New York spokesman Jamael Bowman wrote on Twitter on Wednesday that the latest extension of Biden’s pay cut was “not enough.” “Instead of constantly extending the pressure drop,” Bowman said, “it should cancel all student loan debt.”
