- Student-loan payments are set to resume in just over a week.
- Lawmakers are using this time to sway Biden's decision on a payment pause extension and debt cancellation.
Long-awaited relief could finally be in store for millions of federal student-loan borrowers this week — and lawmakers are pushing for their desired outcomes up until the final bell.
On the campaign trail, President Joe Biden told his voters he would act on the growing $1.7 trillion student debt crisis. He extended the student-loan payment pause as one of his first actions in office, and continued to extend it an additional three times, most recently through August 31.
But he also campaigned on approving $10,000 in debt cancellation, and while he has not publicly confirmed the exact amount of relief he is considering, he said himself that an announcement of relief will be made before borrowers have to restart paying off their debt.
But those two policies — debt cancellation and a payment pause extension — are still two major question marks, and borrowers have just over a week before they could be hit with another monthly bill. Lawmakers and advocates want answers.
Republicans on the House education committee wrote on Twitter on Monday, "#studentloan borrowers and servicers need clarity on what @POTUS and @usedgov intend to do about the repayment pause. Why is the administration taking so long, and causing so much anxiety?"
Education Secretary Miguel Cardona said on Sunday that borrowers will have an update "within the next week or so," and the department declined to comment on the record to Insider on a specific announcement timeline. But the department is ready to implement relief once Biden signs off — Politico recently obtained detailed plans on its preparedness to carry out loan forgiveness.
In the meantime, Democrats are urging the president to go big, while Republicans want to limit relief.
The student-debt relief debate continues
Student-loan forgiveness has always been controversial. While advocates for relief say canceling debt and extending the pause will stimulate the economy and help borrowers who need it the most, critics have argued any broad relief will exacerbate inflation and help the highest earners. Those arguments haven't changed — but they have ramped up in anticipation of a decision from Biden.
Chair of the Congressional Progressive Caucus Pramila Jayapal wrote on Twitter on Monday that "50% of parents with student loan debt said that if payments restart, they won't be able to meet their families' basic financial needs."
"That's wrong," Jayapal wrote. "@POTUS must cancel student loan debt."
Vermont Sen. Bernie Sanders tweeted on Monday, "if we can bail out Wall Street after their greed, recklessness, and illegal behavior drove us into the worst recession in modern history, then YES — we absolutely can cancel every single cent of student debt in this country."
Republican lawmakers feel otherwise. Three of them recently introduced legislation to end the student-loan payment pause and prevent Biden from enacting broad student loan forgiveness. Rep. Adam Kinzinger of Illinois wrote on Monday that if Biden cancels debt for students, will he also forgive debt for "those who didn't go to college, like the truck driver who is paying off his truck? Or the barber paying off his equipment?"
Kinzinger also appeared to endorse a tweet thread from former Treasury Secretary Larry Summers who said he hopes Biden "does not contribute to inflation macro economically by offering unreasonably generous student loan relief or micro economically by encouraging college tuition increases."
—Lawrence H. Summers (@LHSummers) August 22, 2022
While many critics have pointed to inflation as to why student-loan relief should not be implemented, Insider previously reported that the economy has been doing fine without student-loan payments, and some administration officials would agree. Treasury Secretary Janet Yellen told lawmakers in May that broad relief "could be good for the economy," and she recognizes the "substantial burden" debt can have on borrowers.
It remains to be seen which argument will win over Biden, and whether all federal borrowers will reap the benefits of relief. NAACP's Director of Youth and College Wisdom Cole said in a statement that if Biden can keep extending the pause, there's no reason he can't cancel at least $50,000 in student debt.
"Do it to reduce the racial wealth gap, do it to capture the interest of many who will participate in the November election, do it for the future of American families and communities," Cole said. "Every generation will be grateful you did."