Biden Extends Pause on Student Loan Repayments, Again – Opinion

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Joe Biden, President of the United States announced on December 22 that he unilaterally extended student loan repayments’ pause for another 90 days until May 1, 2022.

The latest pause on repayments, which is now the third postponement under Biden, “has given 41 million Americans badly-needed breathing room during the economic upheaval caused by the global COVID-19 pandemic,” according to the Biden administration.

At the moment, student debt stands at an astounding $1.7 trillion. Around one third of the 41,000,000 Americans that have student loans are delinquent or in default.

It begs the question, “Is it smart for the Biden Administration to kick the can down yet another road when it comes to student loan repayment? The answer to that question is unambiguous.

These 41 million Americans, who owe $1.7 trillion of student loan debt, entered into these contracts freely. Every single American who owes student loan repayments has a contractual obligation to pay back the entire amount borrowed.

Yet, the Federal Government has evicted legally binding contracts during COVID-19.

Apart from multiple extensions of student loan debt repayments, the federal government also nullified existing leases between landlords and tenants under the federal expulsion moratorium enacted by the Centers for Disease Control and Prevention.

This is not a safe road. Once the population is told they no longer must abide by legally binding contracts, the slippery slope of ignoring one’s contractual obligations has been unleashed.

Many on the left find this more than acceptable.

In fact, on December 22, the very day that Biden announced his constitutionally dubious extension on student loan debt repayments, Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), and Rep. Ayanna Pressley (D-MA) issued a statement urging Biden to “take executive action to cancel $50,000 in student debt, which will help close the racial wealth gap for borrowers and accelerate our economic recovery.”

According to their statement, “If the payments resumed as scheduled on February 1, 2022, approximately $7 billion a month and $85 billion annually will be stripped from over 18 million student loan borrowers’ budgets.”

It is absurd. Those 18 million student loan borrowers would not be “stripped” of $85 billion annually. The borrowers would repay the funds they borrowed.

Telling millions of Americans that money they borrow is not due back to them creates a moral risk. The lender, who contributed up-front funding so that many Americans could continue their educations, is also not considered.

Unfortunately, the Democratic Party is far too blind to this.

Apart from the moral risk of cancelling/suspending student loan debt, how about millions of Americans like this author who literally worked all day to repay their student loans?

To all Americans who faithfully paid their student loans, it is grossly unfair that they decide arbitrarily that someone who borrowed large sums of money to go to college does not have to repay what was borrowed.

Furthermore, it sets a precedent that could cause chaos when it comes to Americans’ repaying credit card debt, outstanding auto loans, home loans, etc.

The Biden administration would be wise to recognize the ethical conundrum that it is introducing when it makes it clear that repaying one’s loans is a choice, not a duty.

Chris Talgo ([email protected]) Senior editor, The Heartland Institute