“Later this week we will announce whether to extend the break,” a spokesperson for the education ministry said in a statement to POLITICO.
The administration’s shift in mindset over the fast-approaching February 1 deadline for restarting payments comes as the White House faced a torrent of pressure from Democrats seeking another extension of the relief.
The White House had previously said it was assessing the impact of the Omicron variant, but said it was still preparing to restart collecting monthly payments on February 1.
POLITICO reported over the weekend of a tense meeting between White House officials and student debt activists who want Biden to extend the relief and use executive action to undo large swathes of the debt. current student debt. White House officials were not convinced at the time to extend the relief, POLITICO reported, citing people familiar with the meeting.
Capitol Hill Democrats had pressured the Biden administration to extend the relief.
Senate Majority Leader Chuck Schumer, Senator Elizabeth Warren (D-Mass.) And Rep. Ayanna Pressley (D-Mass.) Said earlier this month that the moratorium on payments and interest on student loans should be extended until the economy reaches pre-pandemic employment levels.
Some progressives have been more blunt about the political consequences they fear next year, unless the Biden administration takes more aggressive action to help student loan borrowers, especially after negotiations on Build fail. Back Better.
âWith the BBB delay, child tax credits will expire and student loans will restart in a few weeks. Working families could lose thousands of dollars / month as prices rise, âRepresentative Alexandria Ocasio-Cortez (DN.Y.) said on Twitter on Monday. “That alone is a reason for @POTUS act on student loans as soon as possible – with a moratorium or cancellation. “
Representative Ro Khanna (D-California) said on twitter that the Biden administration’s plans to restart student loan payments “don’t make sense.”
Many other Democrats have also urged the Biden administration to extend the relief.
“We need to tackle student debt in general, but until then an extension would be a step in the right direction,” said Senator Raphael Warnock (D-Ga.), Who is running for re-election in 2022. He said the relief would help both “struggling families in the midst of a pandemic” and the economy in general.
Warnock sent a letter with 13 other Senate Democrats to Biden earlier this month calling on the administration to at least continue to keep interest rates at 0% on federal student loans even if monthly payments resume. Senator Chris Van Hollen (D-Md.), Who signed the letter, said he believed the administration was considering an extension of the relief. âI don’t know what the odds are right now, but we’re pushing them pretty hard,â he said on Friday.
Representative Bobby Scott (D-Va.), Chairman of the House education committee, also supports the continuation of the hiatus on student loan interest, a committee aide confirmed to POLITICO on Tuesday.
A coalition of worker, student and consumer advocacy groups also called for an extension of the relief – as have several think tanks aligned with Biden’s education department.
Republicans, meanwhile, have previously called on the Education Department to restart student loan payments, citing the growing cost to taxpayers of waiving interest and deferring payments. The ministry estimated that pandemic relief for student loans in fiscal 2020 added nearly $ 42 billion to the cost of the student loan program; in fiscal 2021, it cost an additional $ 53 billion.
More than 40 million Americans have benefited from the federal government’s emergency student loan assistance program, which began when the pandemic took off in March 2020. Congress suspended interest and monthly payments for borrowers federal student loans in the CARES Act – which the Trump and Biden administrations have subsequently repeatedly extended through executive action.
More recently, in August, the Biden administration enacted what it called a âfinalâ extension of the relief, which is set to expire in late January.
âSince day one of the Biden administration, we have worked hard to provide meaningful relief to student loan borrowers,â the Education Department spokesperson said in a statement Tuesday. “It started with an extension of the break on federal student loan repayments until January 31, 2022. To date, the break has saved 41 million borrowers tens of billions of dollars.”
Ministry officials have sent out notices to borrowers regarding the restart of payments and also planned ways to soften the blow from the restart of payments next year. Officials planned to provide an initial 90-day grace period for missed payments as well as a comprehensive plan to clear defaults from borrowers who were struggling even before the pandemic. These plans have been discussed internally within the administration but have not yet been publicly announced.
Education Ministry officials announced last week that they would make it easier for borrowers to participate in income-based repayment plans by accepting self-certification of their income, rather than requiring them to submit tax documents.
Department officials urged outside groups to help them get the message across about the impending restart of payments on February 1 during a webinar last week.
Rich Cordray, the head of the Office of Federal Student Aid, which is overseeing the restart of student loan repayments, told the webinar that a smooth transition for borrowers was his “top priority” in the coming weeks. .
“It has a lot of moving parts that we think about carefully, and there are new developments almost every day, so stay tuned.” Cordray said.