Student Debt Payments Should Restart As Scheduled
The 33-month pandemic-era pause on student loan repayments is scheduled to end on December 31, after which borrowers will begin making loan payments as intended under the law.
With one court ruling that the President’s unilateral debt cancellation actions are illegal and another court putting an injunction on the cancellation while they review a legal challenge, the Administration is reportedly considering an eighth extension of the repayment pause.
Should the President continue the repayment pause for the rest of his term, it would cost an additional $120 billion while worsening inflation, increasing recession risk, and disproportionately benefiting high-income households with medical, law, and other advanced degrees.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
With inflation at a 40-year high and unemployment near historic lows, there is absolutely no justification for extending the student debt pause yet again. The pause was put in place as an emergency measure early in the pandemic. As the President has repeatedly pointed out, the pandemic recession is long over.
The student debt pause has already cost the federal government over $150 billion and contributed to inflation. Extending the pause through the end of 2024 would cost over $120 billion more, bringing the total cost to nearly $300 billion.
Whether or not the courts allow the Administration to unilaterally cancel $10,000 to $20,000 per person of student debt should have no bearing on whether we should collect the debt that is currently owed. Why are we continuing to cancel billions of dollars of interest for wealthy doctors and lawyers?
Payments should restart in January as scheduled. Separately, Congress and the President should work together on a plan to address higher education costs and ensure Americans can afford to go to college if they choose.
Continuing the pause won’t make college more affordable. Instead, it will increase inflation, boost the deficit, enhance recession risk, deliver windfall payments to high earners, and further undermine our higher education financing system.
This Administration has been on a reckless borrowing binge – they should not continue on this dangerous path as debt and inflation continue to plague the economy.
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