Updated: Jul 28
During his campaign, President Biden promised to take action on the issue of student loan debt, which is a major burden for millions of Americans. Since taking office, he has made some moves on this front, but the question remains: what exactly has happened with Biden's student loans?
One of Biden's first actions as president was to extend the pause on federal student loan payments and interest that had been put in place in response to the COVID-19 pandemic. Originally set to expire on September 30, 2021, the pause has been extended multiple times, most recently until January 31, 2022. This has given borrowers some breathing room as they deal with the financial fallout of the pandemic.
In addition to the payment and interest pause, Biden has also taken some steps toward canceling student loan debt. In March 2021, he directed the Secretary of Education to prepare a report on the feasibility of canceling up to $50,000 in federal student loan debt per borrower. The report was delivered in September and found that canceling that amount of debt would have a significant positive impact on borrowers' financial well-being and the economy as a whole. However, it also noted that such a move would be expensive and would benefit higher-income borrowers as well as those with lower incomes.
While Biden has expressed support for canceling up to $10,000 in student loan debt per borrower, he has not yet taken any concrete action to make this happen. In fact, his administration has been criticized by some progressives for not doing enough on the issue of student loan debt.
So, what does all of this mean for borrowers? For now, the federal student loan payment and interest pause is still in effect, which means that borrowers do not have to make payments and their loans are not accruing interest. However, it is unclear whether this will be extended again beyond January 31, 2022. As for student loan cancellation, it remains to be seen whether Biden will take action on this issue, and if so, how much debt will be canceled and who will be eligible.
While Biden has made some moves on the issue of student loan debt, there is still much uncertainty about what will happen next. Borrowers should stay informed and be prepared for any changes that may come their way.
Here are some statistics and references to back up the information in this post:
As of June 2021, the federal student loan debt was over $1.6 trillion, with about 43 million borrowers. (Federal Student Aid)
A recent report by the Brookings Institution found that canceling up to $50,000 in student loan debt per borrower would benefit about 36 million borrowers, but would also cost about $1 trillion. (Brookings Institution)
A poll by Data for Progress found that 58% of Americans support canceling up to $50,000 in student loan debt per borrower. (Data for Progress)
An analysis by the Urban Institute found that canceling up to $10,000 in student loan debt per borrower would benefit about 15.3 million borrowers, with an average debt reduction of $2,900. (Urban Institute)