Photo by Quinn Dombrowski, Creative Commons License 2.0

President Joe Biden gave folks with student debt a nice stocking stuffer Wednesday, extending the moratorium on student loan payments for another three months because of the continuing pandemic, particularly the threat of the Omicron variant. Student loan payments had been set to restart in February 2020, but Biden's executive order moves that restart date back to May 1, 2020, instead.

In his statement announcing the extension, Biden noted that while the economy is steadily recovering from the pandemic recession,

we know that millions of student loan borrowers are still coping with the impacts of the pandemic and need some more time before resuming payments. This is an issue Vice President Harris has been closely focused on, and one we both care deeply about.

NPR reports the pause will apply to loan repayments and also to the accrual of interest and collections on student debt that's in default. All of those have been on hold since March 2020, when they were paused by the first pandemic relief bill, the CARES Act, and the pause has subsequently been extended by the Trump and Biden administrations.


The temporary relief from student debt has been a big heckin' deal for about 41 million student loan borrowers, NPR explains:

The paused payments are estimated to be saving borrowers $5 billion a month, according to the U.S. Department of Education. By February 2022, that would have accounted for more than $115 billion dollars.

In a survey, nearly half (49%) of about 500 borrowers felt "not at all confident" they would be able to make their student loan payments come Feb. 1, according to research from the progressive group Data for Progress.

So hurrah, there's one less thing for lots of people to worry about, at least until May. Nonetheless, Biden's statement on the extension advised folks to start preparing for the resumption of payments by checking to see what help is available to them through the Department of Education, and to look at the possibility of reducing payments through an income-based repayment plan if they haven't already.

Some people working in public service may qualify for loan forgiveness, too, since the Education Department recently expanded that program. That's a sharp contrast from the previous administration's practice of finding literally any possible excuse to deny applications as it did under former Education Secretary Betsy DeVos, who we understand has taken seasonal work this year as the Krampus.

Whenever student loan repayments get going again, it's likely to be pretty messy, according to NPR, since student debt is itself a thorny confusing mess that drives many people to outright despair.

Whenever loan payments resume, many experts say the process will be quite messy, given so many back and forths with borrowers. Even a 2020 report from the Education Department noted the resumption of payments would be messy. Loan servicers and the federal government, the report says, will "face a heavy burden in 'converting' millions of borrowers to active repayment." The transition could also be confusing to borrowers, with some "becoming delinquent, at least initially."

The restart will be hardest on people who were in default when the pause went into effect last year, since they are already

more likely to be low-income, people of color, have some college and no degree, or work in low-wage jobs. Borrowers in default lose access to income-based repayment plans and can have their tax refund or paychecks garnished by the government. Older borrowers can even lose part of their Social Security checks. Now, those penalties won't resume for these borrowers for another 90 days.

There's still the possibility that Biden could forgive some portion of student debt by executive order; he has previously said he wants to forgive up to $10,000 in debt per borrower, but needs to make sure he has the authority to do so. Senators Elizabeth Warren and Chuck Schumer say hell yes he has the authority to do it unilaterally, and should use it to erase $50,000 in debt per borrower, at that. And following Joe Manchin's rejection of Biden's domestic policy agenda in the Build Back Better bill, Rep. Alexandria Ocasio-Cortez has urged him to get busy with his executive authority right damn now.

Long term, we sure like this idea from Rep. Eric Swalwell, who has reintroduced a bill that would eliminate interest on federal student loans, both those already out there and in the future:



And now you may proceed to be very polite to each other in the comments, because we are a community, and even if we have different views about student loans, we do not let those differences lead us to call our fellow readers ignorant shitheads or soulless ghouls, please.

[White House / NPR / Business Insider / Photo: Quinn Dombrowski, Creative Commons License 2.0]

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Doktor Zoom

Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.

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