President Joe Biden will not extend pandemic student loan relief but his administration plans to make it a smoother transition for borrowers, Insider reports.
Student loan relief approved by Congress will expire on January 31 but Biden is resisting pressure from Democrats to extend the program.
"We're still assessing the impact of the Omicron variant, but a smooth transition back into repayment is a high priority for the administration," said White House press secretary Jen Psaki. "In the coming weeks, we will release more details about our plan and will engage directly with student loan borrowers to ensure that they have the resources they need and are in the appropriate repayment plan.”
Payments have been frozen for nearly two years since the pandemic hit. Both Biden and former President Donald Trump have extended the pause.
Senate Majority Leader Chuck Schumer, Sen. Elizabeth Warren, and Rep. Ayanna Pressley last week urged Biden to extend it again.
"The pause on federal student loan payments, interest, and collections has improved borrowers' economic security, allowing them to invest in their families, save for emergencies, and pay down other debt," the lawmakers said in a letter.
New changes:
The administration said it would take steps to make it easier for borrowers to start paying off their loans again.
The administration plans to make it easier for borrowers to apply for a monthly loan repayment plan based on income and family size. The Federal Student Aid office has already revised some of its requirements for borrowers to recertify their incomes.
Borrowers will not have to recertify their incomes until August and can self-report income for direct loans.
Under the program, borrowers who are struggling financially may pay as little as $0. After 20 years, some people can qualify for total loan forgiveness.
White House punts on debt cancellation:
Biden previously vowed to cancel $10,000 in student loans per borrower but there has yet to be any progress on the plan.
Biden previously resisted pressure from some Democrats to cancel up to $50,000 in student debt per borrower by arguing that he only had the power to go up to $10,000. But now the administration says they’re waiting for Congress to pass legislation to do so rather than an executive order from the president.
"If Congress sends him a bill, he's happy to sign it. They haven't sent him a bill on that yet," said Psaki.
Schumer and Warren maintain that Biden can cancel $50,000 per borrower through executive action.
"Cancelling $50,000 in student debt would completely wipe out student loans for 84% of borrowers, including more than 3 million borrowers who have been repaying their loans for more than 20 years," Warren told Insider. "This is the single most effective executive action President Biden could take to jumpstart our economy and begin to narrow the racial wealth gap."
