The Biden administration’s Department of Education directed its federal student loan servicers not to notify borrowers that payments would resume after May 1, indicating that the administration may once again extend the pause on student loan repayments, according to reports.
CNBC reported Wednesday that the federal student loan servicers, who were expected to begin sending out letters to borrowers at the end of the month, are holding off on sending out notifications for the time being.
At the beginning of the COVID-19 pandemic in March 2020, student loan repayments were temporarily paused and the federal interest rate was lowered to 0% under the CARES Act, as The Daily Wire noted. That pause was extended by executive order under former President Donald Trump, then Joe Biden extended the pause on his first day in office. The freeze lasted until September 2021, but Biden extended that pause again in August through January 2022. In December, Biden again extended the pause for another 90 days, until May 1, after a campaign from left-wing activist groups pressuring Biden to extend the freeze. The pause currently affects some 25 million Americans, CNBC reported.
A spokesperson for the Department of Education told CNBC that it was communicating on a regular basis with federal loan servicers about the “type and cadence” of outreach the servicers make to student debt holders.
White House Chief of Staff Ron Klain said in an interview with the left-wing podcast “Pod Save America” that the Biden administration was waiting to make a decision on student loan debt before it resumed payments. “The president is going to look at what we should do on student debt before the pause expires, or he’ll extend the pause,” Klain said. Biden previously campaigned on canceling tens of thousands of dollars in student debt per borrower, and released a memo in November which claimed that Biden has the authority to cancel student debt. Dozens of progressive Democrats have called on Biden to cancel up to $50,000 per borrower.
The Hill also reported Wednesday that it had reached out to the Department of Education for comment. A spokesperson for the Department did not confirm the report, but did confirm that it was in regular contact with servicers. “The Department will continue communicating directly with borrowers about federal student loan repayment by providing clear and timely updates,” the spokesperson said, via The Hill. “The Department’s Federal Student Aid office will also continue communicating regularly with servicers about the type and cadence of servicer outreach to borrowers.”
As The Daily Wire reported, initial reports that the Biden administration was considering extending the freeze drew criticism from conservative leaders.
“Joe Biden wants to extend the student loan moratorium so no one—regardless of income or wealth—has to pay back a dollar in debt. Instead, the taxpayers pick up the tab,” tweeted Senator Tom Cotton. “This is a wealth transfer from the poor to the rich.”
“Biden plans to extend the freeze on student loan payments until after the Midterm elections (freeze will currently end in May),” Heritage Action tweeted. “The Dems chances are so bad, the only way to win is to continue the natl. emergency through Nov. in order to win over voters.”
“Biden using Ukraine as cover to push bad policy is outrageous,” added Republican communicator Matt Whitlock. “Forcing working families to foot the bill for the student loans of overwhelmingly upper-class students to get grad degrees is insane. There is no more COVID emergency to justify this.”
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