Education Department Secretary Miguel Cardona announced his agency is "preparing to restart" payments on federal student loans that were paused during the COVID-19 pandemic, Breitbart reported. This comes after President Joe Biden dangled the carrot of student loan forgiveness as a ploy to garner votes.
During a Senate Appropriations Committee hearing last week, Sen. Katie Britt (R-AL) compared the issue of loan repayment with the debt ceiling debate President Joe Biden is embroiled in with the GOP, Fox Business News reported. The freshman Senator used a comment made by White House press secretary Karine Jean-Pierre Monday as a jumping-off point.
"If you buy a car, you are expected to pay the monthly payments," Jean-Pierre had said about the necessity of not allowing the U.S. to default on its debts. "If you buy a home, you are expected to pay the mortgage every month. That is the expectation," Jean-Pierre added.
Surprisingly, Cardona said he agreed with that statement despite evidence to the contrary, and Britt noted, "that same logic must apply to student loans." Cardona replied, "We agree, and we're preparing to restart repayment because the emergency period is over, and we're preparing our borrowers to restart."
He stated that he was able to cancel some student debt under the HEROES, which "provides me the opportunity to create a waiver for those who are impacted significantly by the pandemic — very similar to small businesses the year before, where Congress provided a little bit of support." There is no word on when repayments will begin, and Cardona didn't elaborate.
However, the Department of Education had given student loan companies guidelines for collecting repayments starting in October, and student loan servicing companies are required to notify borrowers of upcoming repayments as of Aug. 31.
This will end more than three years of a pause on such repayments. In March 2020, then-President Donald Trump paused payments and dropped interest rates on student loans to zero at the start of the pandemic under the CARES Act but it has been extended several times under the Biden administration.
Biden has been attempting student loan forgiveness as part of his 2022 midterm elections strategy and, it seems, for his 2024 reelection bid as well. His plan is to eliminate up to $20,000 in student loans, which would amount to canceling $441 billion in student debt from 40 million borrowers.
The strategy was a winner as the youth vote effectively stopped the GOP red wave in the House and Senate, The Hill reported. "Young people are getting more involved in the issue of student loan debt than ever before," Cody Hounanian, executive director of the Student Debt Crisis Center, said.
"In the past, what we found was that current students, recent graduates, and young people generally, they hadn’t really felt the burden of student debt in the way that maybe older borrowers did," he claimed. "That has completely turned, a 180-degree turn."
"Young people, they see that student debt is an economic crisis that is preventing our entire economy from thriving, and they see the writing on the wall that their futures are at risk because of the student debt crisis,” Hounanian added. Perhaps buying votes is easier than ever among this demographic.
Other Democrats have similarly used the issue as a promised handout to young voters. In 2021, Sen. Elizabeth Warren (D-MA) and Senate Majority Leader Charles Schumer (D-NY) were campaigning for debt forgiveness up to $50,000.
“An ocean of student loan debt is holding back 43 million borrowers and disproportionately weighing down Black and Brown Americans," they claimed, throwing in the race card for good measure. "Canceling $50,000 in federal student loan debt will help close the racial wealth gap, benefit the 40% of borrowers who do not have a college degree, and help stimulate the economy," Warren and Schumer said.
This issue about student loan repayment is so clearly a political tool meant to elect Democrats. It's surprising they're talking about resuming repayments, but there's no telling what will really happen when the rubber meets the road for 2024.