Biden facing pressure to extend loan repayment pause

WASHINGTON — In the days and weeks before the midterm election, President Joe Biden trumpeted his plan to cancel billions in student loans as he rallied young people to support Democrats.

But now the entire initiative is in jeopardy because of legal challenges that could ensure no one receives a dollar of debt relief.

The White House insists it will ultimately prevail even though two federal courts blocked the program from taking effect. However, the setbacks have rattled supporters who fear that more than 40 million Americans who expected relief will instead start getting billed for their student debt in January, when a pandemicera moratorium on payments is slated to expire.

“You cannot ask people to ... (repay) a debt that shouldn’t exist,” said Melissa Byrne, an advocate for loan cancellation. “We bear no blame in this broken system.”

The impasse has left the White House in a bind over whether to extend the moratorium if the legal battle drags on even though Biden has said the pandemic, the original reason for the pause in payments, “is over.”

The freeze has already cost the federal government more than $100 billion in lost revenue, according to the Government Accountability Office. Critics such as the Committee for a Responsible Federal Budget are warning Biden that another extension could worsen inflation and raise the risk of recession.

Republicans oppose cancellation as an unfair, arguing Americans who didn’t go to college will bear the cost as well. Conservatives have orchestrated many legal attacks against Biden’s plan.

Meanwhile, borrowers across the nation face uncertainty. An estimated 20 million were eligible to get their federal student debt canceled entirely, which would cancel $10,000 in student loan debt for those making less than $125,000, or households making less than $250,000. Those who receive Pell Grants would get another $10,000 in debt forgiveness.