The Biden administration announced a “final extension” on federal student loans through January 2021. The left celebrated the move but said more should be done.
Summary
Like the eviction moratorium, President Biden, facing pressure from the socialist wing of the Democratic Party, announced an extension of the pause on collection and interest on federally held student loans on Friday.
- The pause on federal student payments, which initially began last year when the CARES Act was passed due to the coronavirus pandemic, is being extended to January 31, 2022.
- Collectively, Americans owe $1.6 trillion in student debt, which “top Democrats” have urged the President to simply cancel much of it, up to $50,000 per borrower.
- The Biden administration is calling the pause the “final extension”, giving “borrowers more time and more certainty as they prepare to restart student loan repayments.”
- While not directly related, law students and young lawyers are lobbying their lobbying group, the American Bar Association, to ask Congress to change bankruptcy law to include student loans eligible for discharge.
- The New York Times celebrated the extension, thoroughly quoting activists and Democrat elected officials, who said “our broken student loan system continues to exacerbate racial wealth gaps”.
- NBC News highlighted the Department of Education’s efforts to provide notice and information to “make sure borrowers are aware that payments are once again due.”
- USA Today followed the same vein as NBC News, arguing “Collecting on the nation’s $1.6 trillion student loan bills is already a daunting task during normal times. Expecting borrowers to restart payments after they have been paused for nearly two years will be an even more difficult challenge.”
- Fox Business covered Republican criticism of the extension, quoting North Carolina Rep Virginia Foxx: “This extension does a grave disservice to borrowers across the country, and our children will pay the ultimate price for this irresponsible delay.”
- The Daily Caller tied the student loan pause to Biden’s eviction moratorium extension earlier this week, reporting it as “a similar extension” “fraught with legal questions.”
- Forbes’ reporting highlighted the calls by “advocates for student loan borrowers” for the Biden administration to “provide more widespread relief to borrowers.”
Author’s Take
The phrasing used by NBC News and USA Today is notable. It is setting up the argument for blanket cancellation. When the new extension expires, the argument will likely be that borrowers are simply not prepared, “new” payments will burden them, and the cost of servicing the loans is not worth it.
The crusade by leftist politicians for student loan forgiveness should not be ignored or derided by conservatives. Yes, the borrowers share the majority of the responsibility for the size of their loans. But as the famous AEI inflation chart shows, education expenses are rising at a far higher rate than inflation and many consumer goods. Conservatives would do well to argue in favor of gutting higher education institution’s access to a gigantic (and growing) pot of free (for them) money in exchange for student loan forgiveness.
The debate over the utility of various college programs and majors is fun fodder for the culture war but it misses the real point: Higher education has no reason to keep costs down when there are trillions in loans available for students. Those borrowing for an increasingly ubiquitous and decreasingly useful degree are the ones paying for the Big Government’s collusion with Big Education.
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© Dallas Gerber, 2021
