The moratorium on student loan payments and interest is set to expire Aug. 31. That means President Joe Biden has a big announcement to make within the next two weeks as to whether he will end or extend the freeze. Political experts believe with the midterm elections right around the corner, he will almost certainly keep the policy in place.
“The Department of Education has not notified the loan services to prepare for any repayment schedule. So I think those with student loans, who of course, are in the tens of millions, about 40 million, they can relax at least for the next few months,” former Rep. Jim Moran, D-Va, told Straight Arrow News.
Moran, who served in Congress from 1991 to 2015, expects the president to keep the pause going until at least the end of January 2023, and he wouldn’t be surprised if Biden provides loan forgiveness.
“I think there may even be some expansion of the Public Service Loan Forgiveness. Certainly to nonprofits that are for the purpose of enhancing society and the economy, you’ll probably get an expansion of the public service definition for loan forgiveness,” Moran, who served on the Appropriations Committee, said.
Once the midterms are over, there are still political variables to take into account. For instance, if the Democrats achieve their goal of forgiving $50,000 per borrower, Moran thinks there could be some blowback.
“Well, I do think the Biden administration needs to be careful about this. Because a lot of the working class doesn’t go to college,” Moran said. “And they resent people who do, being able to have their tax money paid, essentially, to relieve their indebtedness. And then there are other families who have paid off their debts, and are going to be resentful of people who were able to avoid paying off those debts”.
The Biden administration just approved another $3.9 billion in forgiveness for 208,000 borrowers who attended ITT Tech from 2005 to 2016. The Biden administration has made a point of forgiving loans for those who were misled or defrauded by for-profit colleges. Moran expects that will continue.
The White House has announced a total of $32 billion in student loan relief since President Biden took office. That includes $13 billion total for those who were taken advantage of through borrower defense or school closures, $9.6 billion through the public service loan forgiveness program, and $9 billion for those with a total and permanent disability.